The Rural Voice, 2005-11, Page 42Grain Markets
There's no shortage of corn, sogbeans
But this crop is getting disposed of anticipated. Basis levels are
rather well thanks to the sale of at extremely high due to countervail
Dave Gordon
is a
commodities
specialist
with LAC,
Inc., Hyde
Park, 519-
473-9333.
By Dave Gordon
Last month. I attempted to give
readers a timeline and route that the
countervail duty application will take
followed by a few of my personal
comments regarding what it will
mean for Ontario producers. My
thinking has not changed and I think
corn producers would be wise to sell
some corn sooner, rather than later.
More on that later in this article.
The soybean harvest is close to
getting finished and it appears that
yields will be better than normal.
Across the province, I have heard
yields range all the way from 25 bu
to 70 bu/acre depending on moisture.
least five vessels' worth'.of soys into
the export market.
CORN:
The USDA monthly supply/
demand report put U.S. corn
production at 10.86 billion bushels
with a yield of more than 146
bu/acre. Anecdotal reports from
producers certainly back up these
figures since almost every report tells
the story of yields that are better than
expected. The one positive in the
report was on the demand where
domestic usage was increased by 65
million bushels. I would not be
surprised now to see total U.S.
production go above 11 billion
bushels, which will attest to drought
resistance genetics that is being bred
into many new corn hybrids.
In Ontario, corn harvest is
progressing rapidly and yields and
quality are outstanding in most areas.
Even where drought was prevalent,
yields are 20 - 30 bushels better than
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38 THE RURAL VOICE
discussions. Even though prices are
low, Ontario basis is probably $.30
higher than it would be under normal
circumstances. It may go a little
higher, but not until harvest has
wound down since feed mills and
industrial processors are jammed with
corn right now. But do not expect any
huge bonanza when the preliminary
countervail announcement is made.
As 1 have already stated, Ontario
basis is relatively high due to the talk
of countervail and_the resulting lack
of producer selling. But there is a lot
of corn ready to be sold when and if
the duty is announced and I think this
selling will mute fur.ther gains in
basis to a large extent.
SOYBEANS:
The U.S.D.A. pushed soybean
production to 2.967 billion bushels in
their latest report even after
adjustments were made to acreage.
They have estimated that 900
thousand acres in the northern
Midwest did not get planted last
spring but yields are much better than
expected and in fact total production
may yet top three billion bushels. The
U.S.D.A. reduced 2004-2005
production and carryover figures,
which go a long way to offsetting the
current year's production increase. In
fact, carryover may only increase by
four million bushels year over year.
In Ontario, the soybean crop is
generally yielding better than
expected in most parts of the
province. However, shipping has not
been much of a problem since five or
six vessels of soybeans have already
been exported from Ontario.
A lot of beans remain in storage
around the province so there will be
no shortage of supply in the coming
year for our crushers. Basis has
improved by $.08 - $.10 in U.S. funds
even though the Canadianfunds basis
has not reflected this increase
because of the strength in the loonie
and the soft futures prices.
If there is one thing that was
learned this year, it was the fact that
drought no longer guarantees that
yields will go down and prices will