The Rural Voice, 1985-01, Page 4THE RURAL VOICE
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2 THE RURAL VOICE
FARM MARKET PERSPECTIVE
This article was prepared on
December 12th by John DePutter
CATTLE RALLIED IN NOV-
EMBER, as predicted in this column
in October. The latest U.S. Depart-
ment of Agriculture forecast is for
American choice steers to average
between $64 and $68 during the first
quarter of 1985, but many private
analysts think that prediction is too
low. Many still look for the $68 to
$72 area in the States. If the more
bullish analysts are right, there will be
good prices for both American and
Canadian cattlemen next year.
FEDERAL ECONOMISTS SPEAK-
ING AT CANADA'S RECENT AN-
NUAL AGRICULTURAL OUT-
LOOK CONFERENCE SAID BEEF
PRODUCERS SHOULD BENEFIT
FROM• A DECLINE IN THE
NORTH AMERICAN SUPPLY.
The forecasters said steer prices
should hit $90 by mid -1985. Lower
grain supplies in Canada's West forc-
ed ranchers to sell more animals into
Ontario feedlot this year than nor-
mal, thus reducing the amount of
stock cattle that will be available next
year. U.S. forecasters expect a 4 per
cent decline in American beef produc-
tion during 1985, with the reduction
in the second quarter being 8 per cent.
U.S. HOG MARKETS IMPROVED
DRAMATICALLY DURING NOV-
EMBER. Cash Omaha hogs were
more than $51 as the mid-December
period approached. The price jump
was the result of lower slaughter
levels, which were 5 to 10 per cent
below year-earlier marketings. The
U.S. hog:corn ratio, which was only
11.1 in the fall of 1983, improved to
about 19:1. Thus, the industry finally
enjoyed some profit. Meanwhile, the
International Trade Commission has
ruled against Canada, saying our hog
exports are damaging to U.S.
markets. It's up to us to prove now
that our stabilization programs are
not to blame. If we lose, there could
be trouble at the border.
IN THE U.S., CORN FUTURES
REMAINED IN A DOWNTREND
INTO EARLY DECEMBER, but in
Ontario, the basis was strong.
December futures approached the
$2.55/bu level, where some support
was finally found. In Ontario, the
basis at many commercial elevators
rose to 55 cents over March futures,
underpinned by a strong rail market.
The strong local market occurred
despite a Ministry of Agriculture and
Food crop estimate of 212.2 million
bushels; up 23 per cent from 1983.
THE U.S. CORN CARRYOVER
AFTER THIS MARKETING YEAR
SHOULD BE 1.125 BILLION
BUSHELS, reported USDA on
December 11. This would be up 56
per cent from last year's carryover.
But it's not an extremely burdensome
figure. Chances are it's already
reflected in current lower values and
is not bearish enough to pressure
prices even further. Much of that car-
ryover will be locked away in the loan
program.
• l »_
-T-1 � - , iyi^
SOYBEAN PRICES MADE A MA-
JOR LOW ON SEPTEMBER 21