The Rural Voice, 1985-12, Page 22SMYTN
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4174 •
In The Joyful Spirit
Of Christmas We
Extend To You And
Your Loved Ones
Our Best Wishes.
George Smyth
Welding and
Machine Shop Ltd
•
"We build the best
and repair the rest."
R.R. 2, AUBURN, ONT., NOM 1E0
519-529-7212
20 1 111 Rt'RAI 1111C1
FARM COMMODITY WATCH
Prices as of the market close
November 19, 1985
LIVE CATTLE: Continued strength
in cash markets lent a firm tone to
cattle futures markets with the
December contract trading as high as
67.70 over the past one-month
period. Previous contract highs on
the December contract had been
67.85, and those levels seemed to pre-
sent resistance to these markets.
December cattle closed on November
19 at 65.90, representing a gain of
2.47 from levels of a month previous.
February cattle closed at 62.05 on
November 19.
The average relationship between
cash prices and nearest term futures is
approximately a 2.5 -cent gap, with
cash generally trading about 2 1/2
cents under the near term futures.
Strength in cash markets suggests that
the near term futures should remain
steady over the short haul.
The November Cattle -in -Feed
report was due on the 22nd, and the
estimates are as follows:
Cattle in Feed down 9-11%
Placements up 4-607o
Marketings down 2010 to unchanged
Price projections into 1986 will
concentrate on three fundamentals:
1) fed cattle marketings, 2) non -fed
slaughter, and 3) carcass weights. Fed
cattle marketings and burdensome
market weights were important fac-
tors in 1985 cattle prices, and they
will probably continue to be impor-
tant factors in 1986.
**Hedgers** should watch the
cash/futures relationship closely for
signs of short-term toppiness. Fun-
damentals appear positive, but
futures in the mid -60 area are above
average as far as 10 -year historical
prices are concerned. Hedgers may
consider buying low risk Put options.
LIVE HOGS: Hog prices were the
"man in the middle" over the last
month, with falling pork product
markets pressuring prices on one
hand and strength in the cattle com-
plex lending support to the hog
market on the other hand. December
hog prices closed on November 19 at
47.12, a gain of 1.32 over levels of
one month ago. February live hogs
closed on November 19 at 45.57.
Cash prices in the hog markets
have been soft recently, with hog
slaughter numbers running at
relatively high levels. We expect to see
a declining slaughter number trend
over the November -February time
frame. Any ensuing strength in
futures may be an opportunity for
hedgers to lock in some spring -
summer selling prices, as the
February -April time frame is ex-
pected to show some weakness in
futures. This drop from winter highs
to spring lows is based primarily on
the outlook for a larger than normal
increase in pork supplies from winter
to spring.
**Hedgers** should be watching
futures prices for strength in the
November -February time frame.
Cash prices to reach the 50 -cent area
would be a reasonable objective. At
this time producers may consider
locking in selling prices by buying
limited risk Put options, or by selling
short futures contracts on spring -
summer production.
CORN: Corn prices were the
beneficiary of many positive fun-
damentals over the last month, with
declining interest rates, improving
currency markets, uncertainty in
harvest progress, and lack of farm
selling all lending support to the
market. December futures closed on
November 19 at 241 1/2, a gain of 20
1/2 cents over levels of a month ago.
An interesting feature of the market
has been the strength of the
December corn versus deferred mon-