The Rural Voice, 2001-08, Page 52Grain Markets
the reports from early July. Soybean
acreage is now projected to be much
lower than originally thought and as a
result, production figures are
significantly lower using trend line
yields. As with corn, the crop
condition is deteriorating, especially
in Minnesota and Iowa where the
crop was planted quite late compared
to the eastern belt.
Demand for soybeans has been
extraordinary. Once again, domestic
crush was increased in the July 11
supply/demand report and the
projection for next year is for a
further increase in both exports and
crush. Now, the critical part will be
yield. Currently, the USDA is using a
trend line yield of 39.5 bu/acre, so
any deviation from this will show up
directly on the carryover, which has
already been lowered by 95 million
bushels. Some analysts think the
carryover may actually come in lower
for this year.
In Ontario, basis levels have
strengthened in Canadian funds with
a slightly lower Canadian dollar and
higher futures. In case you haven't
been watching, November soybean
futures traded $1.18 off the lows of
late May. Producers have responded
to this move in the market by selling
both old and new crop soys and I
view this as a good move.
In the overall grain picture, wheat
futures have strengthened as the
harvest glut passes. Harvested wheat
acres are down, but yield has more
than made up the difference.
However, there is export demand for
U.S. wheat and basis levels have
gained some strength. Whether or not
any of this price gain can be
attributed to gains in corn and
soybeans is something I don't know,
although there is usually some
correlation.
The strength we have seen lately
in all grain markets is certainly
welcome news to producers who are
still holding old crop grain and want
to sell new crop. Many producers
who had orders to sell well above the
market are starting to breathe a little
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AUGUST 2001 49