The Rural Voice, 1996-07, Page 20RELIABLE
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16 THE RURAL VOICE
Grain Markets
Markets reacting
day by day
The grain markets of 1996 continue
to be affected by different stimuli
almost daily. Even though prices seem
to have reached a plateau, volatility is
now the main focus.
For most of the past six months, we
have looked toward world demand as
the main reason for high prices, but,
lately the focus has shifted to planting
in the U.S. which has been
progressing at a record slow pace. By
the time you read this article, the
USDA will have released the quarterly
stocks report, supply/demand report
and hopefully the final planted
acreage. Already, corn and soybean
acreage are under intense scrutiny.
Theoretically, soybean acreage could
be 64 million acres and corn acreage
will be less than 80 million acres.
However, at the time of this writing,
soybean planting is a record low 72
per cent completed leading some to
believe that all of the intended acres
will not be planted.
CORN
Corn futures prices have not
reached the all time highs set in May.
However, prices for old crop corn
have settled back from inflated levels
and are now just shy of $7.00/bu in
Ontario. Corn use in the feed industry
has backed off slightly and our prices
are at import levels, but it is still tough
to determine if there is enough corn
left in Ontario to meet users' needs
until October.
Com acreage in the U.S. is defin-
itely reduced from early predictions
and many analysts think that yield
will also be reduced. Conrad Leslie
just released his estimate of an 8.5
billion bushel corn crop based on a
yield of 117 bu/acre compared to last
year's yield of 113 bu/acre.
In Ontario, all of the intended corn
acres did not get planted, but acreage
could be similar or slightly higher
than that of 1995. This year, however,
planting was later than last year and, if
the crop is to mature, we need to have
a very warm summer as well as an
open September with a late first frost.
Even though feed grain acres in the
world are at record levels this year,
the U.S. still needs to produce a good
corn crop to meet projected feed and
export demand. If production is
projected to be reduced for any
reason, new crop futures prices will
likely climb dramatically.
SOYBEANS
Worldwide oilseed acres are down
this year because of the increase in
feed grain acres. Prior to the USDA
report of June 12, soybean acreage in
the U.S. was projected to be similar to
the 1995 acreage. However, the
USDA has now raised their planted
acres by 1.5 million acres to 64
million with an average yield of 36.7
bu/acre. Now, with planting delays,
yields are likely to drop off. As a
result, prices have held steady and
there seems to be good buying support
under the market.
In Ontario, soybean acres have
replaced some winter -killed wheat but
the total planted area may not exceed
last year's 1.82 million acres.
Producers should probably still plant
soys into early July because of the
relatively high prices and the potential
for higher prices.
Old crop soybean basis in Ontario
is quite strong right now and
depending on the Canadian dollar
movement could strengthen even
more. The Ontario crush is high this
year and it doesn't appear there will
be any backing off. New crop basis is
also quite good mostly because of
slow producer selling.
The overall oilseed complex is well
supported and this should continue for
the next several months just because
of the uncertainty of supply.
FEED GRAINS
Feed grain prices have run in
tandem with corn prices over the last
month. Feed wheat is selling for about
$270/mt with western barley trading
for $250/mt. Earlier in the spring,
many feed manufacturers took
advantage of cheaper feed grain prices
to replace corn throughout the summer