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18 THE RURAL VOICE
GRAIN MARKETS
December 13, 1989 — Grain futures
have held steady over the past month,
with the only real strength being
shown in the basis levels. Both corn
and soybean basis have shown some
improvement.
Feed grains have been very strong
relative to corn prices because of
farmer holding of Ontario grains and
smaller quantities of Western grains
being held at the bayports.
CORN
Com futures have held in a fairly nar-
row range even with the large export
sales announced last week. In fact, the
exports have kept the market from
dropping to harvest levels. However,
I still think the wide price difference
between corn and wheat features will
stimulate corn sales in the next year
and keep corn steady to slightly
stronger.
It appears, though, that corn
acreage could increase slightly in the
U.S. this year and once again weather
will come into play during the grow-
ing season. If crop prospects are good
in 1990, there will be little fear of
stocks being depleted.
In Ontario, basis held at the late
harvest levels and actually increased
in Huron County. It appears today
that basis levels will remain fairly
static for the winter months, with little
chance of softening. The strength or
weakness of basis will depend on
producers' willingness to sell or hold
corn this winter.
Com demand will be relatively
steady this year, with both feed and
industrial processors using constant
amounts. Even though St. Lawrence
Starch will be shutting down in April,
CASCO will be using Ontario corn at
least in the winter and early spring.
If demand for Ontario corn
continues on through next spring and
summer, the industrial users may be
able to consumc enough corn to offset
the increased production in Ontario
and leave us in a fairly even stocks
position in Ontario.
SOYBEANS
The soybean futures have remained
flat over the past month but basis lev-
els have strengthened by $.05/bu in
the face of an ever -strengthening
Canadian dollar. Elevators today are
paying $.50 to $.55 + January futures
and these levels are about $.20 higher
than comparable U.S. prices.
My feeling is that the 1989 soy-
bean crop was not quite as good as the
OMAF figures indicate and the result
is very strong bids in Ontario. If, in
fact, the crop is as good as OMAF
indicates, farmers are showing how
tightly they can hold the crop. One
processor is importing soybeans from
Michigan to meet processing needs.
The South American crop is
about 80 per cent planted at this point,
and a reduction in acreage of about 10
per cent is expected because of lower
prices and credit problems in Brazil.
The weather in South America has
generally been favourable, with some
isolated dry areas.
New crop soys are trading at $.25
to $.30/bu higher than old crop soys
and there has been considerable inter-
est in forward contracting for next fall.
FEED GRAINS
The feed grain market has been
booming because of tight farmer hold-
ing in Ontario and some freight prob-
lems out of Western Canada. Prices
of barley and mixed grain are very
high relative to corn values. Ontario
barley is trading near $130./mt while
Western barley is trading at $139. to
$140./mt at bayports. Western oats
are trading at $142./mt at Goderich,
but Ontario oats are discounted
substantially at $110. to $115./mt
because of the large supply in Ontario.
Ontario barley prices may soften
after the new year when growers start
letting their crop onto the market.
I would like to wish everyone all
the best in this holiday season. It is a
time of year to be filled with renewed
hope, and I trust that you can set aside
your day to day worries and reflect on
the good things in your life.0
This information is taken from reliable
sources, but accuracy and completeness are
not guaranteed. Dave Gordon is a grain
merchandiser with London Agricultural
Commodities, Inc. in Hyde Park, Ontario,
519-473-9333 or 1-800-265-1885.