The Rural Voice, 1985-11, Page 9were created on October 7 and have
been tested a couple of times since.
Statistics released in the October 10
crop production report show that the
U.S. bean crop should be about
2.108 -billion bushels; this was no sur-
prise to traders, as the early guesses
were in that area. Last year's produc-
tion was 1.861 -billion bushels. One
feature worthy of note in the soybean
complex has been the recent strength
of soymeal versus soyoil. This
phenomenon may suggest that the
Soviets are buying U.S. origin protein
to enhance their cereal grain crop.
The Soviets have not been major
buyers of U.S. meal since 1979.
**HEDGERS** faced with the
store/sell question should pencil out
the costs and benefits of storing ver -
•us selling, remembering to account
tor interest earned, storage charges,
potential risk, and potential basis
change.
LIVE CATTLE — What a difference
a month makes! From May to
August, live cattle prices were con-
sistently headed downward, but now
for the second month in a row, prices
were moving significantly higher,
associated with a healthy cash
market. December cattle closed at
63.42, a gain of 3.52 cents over the
course of the month. One feature of
the cattle market that traders are wat-
ching closely is the cow slaughter
figures. Cow slaughter is running
significantly behind levels of a year
ago, and seasonally should begin to
escalate as cold weather hastens cull-
ing activity. A higher mix of cows in
the slaughter ratio will have two ef-
fects: it will help to limit average
slaughter weights, which have been a
problem this year, and it may inject a
note of optimism into next year's
price outlooks, if breeding capacity is
reduced. All that being said, will cat-
tle farmers cut back significantly, or
will they instead maintain current
production levels, opting to feed
cheap corn rather than sell it? Stay
tuned! **HEDGERS** may still con-
sider the buying of call options to
cover replacement costs, although
timing may be of key importance
here. Selective hedgers with CALL
options bought at lower prices may
consider lightening up, on the
premise that the bulk of the move in
the cattle market is over for the time
being.
LIVE HOGS — As with the cattle, a
good month in the hog markets.
December live hogs finished at 45.75
)n October 15. That was a gain of
4.30 cents over the course of the
month. For all of 1985, returns from
the "average" farrow -to -finish hog
operation in the cornbelt are expected
to be negative. This will be five years
out of the past six years that
"average" operations have lost
money. Projections for 1986 are ex-
pected to show another losing year,
based on current numbers. In this
type of scenario, will cheap feed be
enough of an incentive to encourage a
build up of hog numbers into next
year? Ironically it might, but the
build up will likely be slower than
normal, with the lack of economic in-
centive and the reduced financial
capacity to expand. **HEDGERS**
should be following the hog market
closely. Traditionally the October
-December time frame is a positive
one for hog prices, and this seasonal
strength should present some ex-
cellent pricing opportunities. For
now, keep your powder dry.
JUST A WORD ABOUT ... SOME
LATE NIGHT COMBINE
THOUGHTS ... There is probably
not a time of year when producers
think more about pricing costs and
profits than at harvest time. "I
should have..., I was going to..., 1
was thinking of..." are all ways that
we procrastinate from time to time.
Harvest will soon quieten down and
producers will have some time to
relax, calculate their year, and plan
the next year. Why not spend a bit of
time thinking about the importance
of marketing, and how each of us as
an inddividual can improve upon
marketing techniques. There is an
abundance of resource material
available from ministry offices,
elevators, colleges and universities,
private agencies, and banking and
brokerage services. Don't be afraid or
ashamed to ask for help. Agricultural
marketing is a sophisticated, ever-
changing concept. Think about this
when you're out in the field in the
middle of the night on the combine,
wondering whether the ends are going
to meet this year. Have a safe
harvest!fl
The information contained herein
is believed accurate, however, Bache
Securities Inc. assumes no respon-
sibility for its use. For specific recom-
mendations and suggestions regar-
ding stop orders please contact your
nearest Bache office.
David Clarke is an Account Ex-
ecutive with the investment firm of
Bache Securities Inc., 376 Richmond
Street, Suite 200, London, Ontario
N6A 3C7, 1-800-265-1570.
"FEED LESS PER LITRE OF MILK"
CO.OP PROUDLY INTRODUCES
"DOUBLE PLUS DAIRY FEEDS"
REGULATED PROTEIN SOLUBILITY (PATENTED)
"PLUS"
REGULATED CARBOHYDRATE
LUCKNOW DISTRICT CO.OPERATIVE
South on Huron Cty. Rd. 1
519-529-7953
West Wawanosh
Mutual Insurance
Company
Dungannon, Ont. NOM 1R0
529-7922
FARMS RESIDENTIAL AUTO
AGENTS
Frank Foran. R R 2 Lucknow 528-3824
Lyons 8 Muthern. 46 West St.. Goderich 524-2664
Donald MacKay. R R 43. Ripley 395-5362
Kenneth B MacLean. R R 42. Paisley 368.7537
John Nixon. R. R 45. Brussels 8879417
Donald R Simpson R R 43. Goderich 529-7567
Delmar Sproul. R R 43 Auburn 529-7273
FOR A QUOTATION ON YOUR FARM,
HOME, COTTAGE OR AUTOMOBILE
INSURANCE, CONTACT THE AGENT
IN YOUR AREA.
DIRECTORS
Eldon Bradley. Lucknow 528-2214
John Bryce. R R 43. Paisley 353-5631
Glen Coultes. R R 45. Brussels 887.6174
Gerald Kerr. P O Box 62 Blyth 523.92-.,
Donald McKenzie. 163 Elgin Ave West
Goderich 524-7602
Gordon A Stewart. R. R 2. Ripley 395.5235
CLAIMS SHOULD BE REPORTED
PROMPTLY TO THE DIRECTOR
IN YOUR AREA.
Norris Peever, Manager
Dungannon, Ontario
NOM 1R0
519-529-7922
NOVFMRE-R 1985 7