The Rural Voice, 2002-02, Page 20WAIT 'TIL NEXT YEAR
The prospects for better crop prices aren't good for 2002 but some
crops offer more opportunities than others
Growers waiting for improved
prices for their crops seem
likely to wait beyond 2002,
Colin Reesor says, because there's
little new strength in any of the main
crops grown in Ontario.
The one crop showing any
strength is corn, said the OMAFRA
commodities specialist who was
making his last address to the Grey -
Bruce Farmers' Week Crops Day
before his retirement. Because U.S.
support programs make it more
favourable for farmers to grow
soybeans than corn, the market is
having to edge up the price in order
to buy corn acres, he said. Because of
that right now new crop prices are
stronger than old crop on the Chicago
Board of Trade, he said.
Reesor sees some of the best
opportunities to sell corn coming in
April, right at planting time. That
said, the market seems "awfully
comfortable" in the $2.10U.S. range
and it may be the basis between the
Ontario price and the Chicago price
that shows the biggest swings.
Ontario users will have to offer
enough to encourage Ontario farmers
to sell or else they'll have to pay the
additional costs of exchange and
transportation to bring in U.S. corn.
This price might change at,
16 THE RURAL VOICE
planting time, however, if Ontario's
farmers show a tendency to plant
corn instead of soybeans. If enough
corn is planted and harvested to push
Ontario into an export position, the
basis could be closer to 60 cents than
90 cents a bushel, Reesor warned.
And corn will look attractive
compared to soybean prices, Reesor
predicted. Soybean futures prices are
still heading down because of big
yields in Brazil.
"It's not a positive outlook," he
said. Essentially there's a six month
crop year now in soybeans and you
have to act fast to take advantage of
price opportunities.
Brazilian growers can harvest
three crops a year of soybeans and
have been turning to soybeans more
and more over corn. The good thing
for Canadian farmers is that the
Brazilian currency has been rising
compared to the U.S. dollar, even as
Canada's dollar has been hurt by the
economic troubles in Argentina. This
lowers the basis for Brazilian
growers.
Because of 2001's dismal weather
condition's, many of the identity
preserved soybeans grown in Ontario
for human consumption ended up
going to crushers but there's still a
shortage of beans for crushing
because of dreadful yields, he said.
The one bright spot has been more
volatility in the oil market, Reesor
said. Soymeal has been the big leader
in the price of soybean components
but oil is improving. That's good
because "oil is consumed by people
and people have money. Meal is
consumed by pigs and they don't
have money." You want oil leading
meal in the pricing of soybean
components, he said.
But oil prices will be affected by
decisions western Canadian farmers
make about what acres to plant in
wheat, oats and canola this spring,
Reesor said. If March planting
intention surveys show farmers plan
on planting more canola, oil prices
may be affected. On the other hand
western producers could split their
acreage between canola, wheat and
oats.
In wheat, the U.S. stockpile has
been shrinking but prices haven't
gone up as once might have been
expected, Reesor said. The reason is
people grow wheat in almost every
major crop -growing area and
somebody is bound to have a bumper
crop nearly every year. Ukraine, once '
a major wheat growing area, had a
large crop this year and that extra
supply took care of a lot of the