The Rural Voice, 1986-09, Page 24CORN
PRODUCERS
CALL US BEFORE
MAKING THAT WET CORN SALE.
WE WILL BUY A TRUCKLOAD
OR LARGER QUANTITIES OF
WET CORN ON YOUR FARM
DURING HARVEST.
CORN
WET
MILLING
CASCO COMPANY
LONDON
1-800-265-0943
A LICENSED DEALER UNDER THE FINANCIAL PROTECTION PROGRAM
DRAINAGE PAYS in INCREASED YIELDS!
According to a University of Guelph study on drained lands
vs. undrained lands, from '1979 to 1984, there was a
70% INCREASE in yield in Spring Grains
44% INCREASE in yield in Winter Wheat
35% INCREASE in yield in Corn
IF YOU WANT A BETTER DRAINAGE PRODUCT ...
ASK FOR ... BRUCE TILE!
Heaviest Tubing available in the industry.
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24 THE RURAL VOICE
COMMODITY
WATCH
Prices as of the market close,
Aug. 21, 1986
Corn — More of the same as prices
continue to erode, with traders
focusing on the main negative
fundamentals of good weather and
lack of export interest. Pressure on
nearby months has been magnified
by reserve rollovers, and will likely
be further pressured in early
September with the beginning of
new crop harvest in the midwest.
December corn futures closed at
1.69'1, a decline of 43/4 cents
from levels of a month ago.
**HEDGERS** who feel reluctant
to sell cash corn at these historical-
ly low levels should explore the
concept of selling cash and buying
replacement CALL OPTIONS.
This strategy provides distinct ad-
vantages: limited risk exposure,
improved cash flow, unlimited
gain potential, and no storage
charges.
As with any type of a hedge
strategy, there are disadvantages:
cost of option usually involves a
premium, and the option buyer
will not benefit from basis gain.
Soybeans — The July weather
market in hindsight appears to
have been just that, a typical
weather driven short term correc-
tion to a longer term down trend.
Delta weather seems to have
moderated, and traders have
become comfortable with the
damage that was done to the Delta
crops. The USDA Crop Produc-
tion estimate for August was a
bearish surprise, with the estimate
of 1.979 -billion bushels exceeding
almost all trade guesses. Traders
are awaiting the official announce-
ment of the 1986 loan rate. We
believe the rate will be $4.77.
November beans closed on August
21 at 4.71'/4, a loss of 441/2 cents
from levels of a month ago.
**HEDGERS** must be wonder-
ing how much lower this market
can go. Only time will tell, but the
loan rate ($4.56 with the Gramm-
Rudman constraint) should pro-
vide some psychological support.
As mentioned in the corn com-
ments, for individuals who want to
keep an interest in the bean
market, a SELL CASH/BUY
CALL OPTION strategy might be
appropriate.
Live cattle — The cattle market