The Rural Voice, 2003-11, Page 39territory, but lower prices should
stimulate domestic use and with the
weak U.S. dollar, exports should
actually meet the USDA's export
estimate. Export sales are already
running ahead of last year. With corn
yields coming in above expectations,
the U.S. farmer is likely to sell some
right off the combine and collect his
LDP.
The Ontario corn grower, on the
other hand, is getting hit twice. Not
only are futures prices going down,
the Canadian dollar is going higher.
At today's new crop basis level, corn
can be imported quite easily which
tells us that the harvest basis is too
high. I think the basis pattern will be
much different than in the last two
years when basis literally exploded in
the drought areas. I haven't heard of
any area in Ontario where the crop is
devastated from drought, so there will
not likely be any sudden moves
higher.
I do think that over all, corn prices
in Ontario will pick up as the year
goes on, but the improvement will
come from the futures market. For
any feeders who need to buy corn, I
think you will get ample opportunity
to make some good buys once harvest
is well underway.
Soybeans
Producers have been reporting
poor soy yields in the U.S. for weeks
now, but in the early part of harvest,
the lower yields were attributed to
short day soys and drought in some
areas. However, the crop is 60 per
cent harvested now and yields are
still disappointing. So, it is no wonder
that futures prices have shot up as it
appears that some rationing will need
to take place over the next three or
four months or at least until the South
American crop comes to market.
It's always said that a short market
has a long tail. This means that prices
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will generally peak early and get
weaker as the marketing year
progresses. The futures market today
is telling producers to sell because
there will be no return for storage.
Look at the soybean futures prices
and you will see an inverted price
structure. In other words the nearby
futures are higher than the forward
months.
In Ontario, even though there are
pockets where the yields are
outstanding, the average yield for the
province will likely come in between
32 and 34 bushels/acre. As a result,
we've seen a stronger than normal
harvest basis with some carry to
January shipments. It appears that
Ontario growers are rewarding the
market both because of the higher
than expected flat price and the
inverted futures market. Flat price
may go higher still, even with a 76 -
cent dollar but it will happen sooner
rather than later.
It seems almost impossible that
two different crops grown in the same
season in the same areas could have
such divergent yields. We've seen
better than expected corn yields and
lower than expected soybean yields
all over North America and the
futures market has accounted for this.
The aberration between corn and soy
prices doesn't happen every day and
it is something that won't last. Will
better than expected soy prices offset
terrible corn prices in your final
income? The answer depends on the
individual producer. I think soybean
pricing today is one of those
marketing opportunities I often talk
about and producers need to sell into
these prices.
If corn prices are to strengthen, I
think it will have to come from the
futures market since I don't see the
Canadian dollar weakening any time
soon. Ontario does need to import
corn throughout the coming year, but
I think the basis in Michigan will be
weaker than last year and this will
translate into a softer basis in
Ontario. So, 1 think producers should
only sell for cash flow or storage
space limitations at harvest and wait
for any better opportunity that might
come along in the next few months.
Take advantage of any pricing
opportunities that come along in the
next two or three months for your
grain and reward the market.0
AgriTech
Making connections
Janice
Becker is
a computer
enthusiast
living near
Walton, ON.
By Janice Becker
With the much of the harvest
completed, there is now time to
consider networking, making
connections to agencies. institutions
and individuals that may be able to
help increase the success of your
agricultural enterprise.
There are a few ways to realize
increased income, just two of which
would be through increased output
and/or reduced expenditures. However.
introducing innovative techniques and
adding value to the product are alterna-
tives that have been given substantial
consideration in recent years.
With the formation of
Aglnnovation. the Ontario
Agricultural Value -Added Innovation
Network (OAVAIN), almost a year
ago, the Brant County group has taken
steps to assist agriculturalists in
acquiring information and referrals in
such areas as technology. infrastruc-
ture. financial resources and business
arrangements.
One great way to become
acquainted with the organization. other
than checking out their website at
www.aginnovation.ca, would be to
attend the upcoming conference
scheduled for Tuesday, December 9 in
Brantford.
At a mere $20 (pre -registered) for
the full-day event. attendees will be
treated to guest speakers discussing the
topic of value chain management and
how it can work for you. Among the
seven planned speakers will be Martin
Gooch, a value chain facilitator with
the Agricultural Adaptation Council.
His workshop will focus on
researching the market, understanding
your goals and intent and creating a
chain to meet market requirements.
Others include John Scott of the
Canadian Federation of Independent
NOVEMBER 2003 35