The Rural Voice, 1996-08, Page 19broke through excellent support at.
$3.50 all the way to $3.30.
New crop com acreage still has
to be confirmed and yield prospects
have to be looked at carefully. Only
three months, ago, we were saying
that a 10 billion bushel corn crop
was needed in the U.S. in order to
rebuild corn stocks. Now however,
we are probably looking at a crop
of 8.5 billion bushels which would
require a reduction in projected
corn usage if a balance is to be
maintained.
In Ontario, corn acreage is
higher than last year but yields will
struggle to be average because of
the late planting. Old crop basis
levels softened during the first half
of July but now seem to be stable at
about $3.00 over September
futures. New crop basis in Ontario
is quite strong at 90 cents over
December futures because of the
lack of farm selling. Producers
probably aren't sure of the crop in
the field and until the last few days
(July 15 - 18) prices have continued
higher. When producers start to sell
new crop corn, you can expect to
see elevator basis drop by about 10
cents per bushel.
SOYBEANS
The whole soybean complex
showed a great deal of strength
during the week of July 8 but
started to slide later and at time of
writing had lost 80 cents per bushel.
The view from Chicago is
Grain Markets
concerned only thc excellent
growing conditions right now. The
fact that world oilseed acreage has
dropped this year is in the
background for the time being and
may be a little shortsighted in the
long run.
The U.S. acreage should be
adjusted upward in the August
USDA but because planting was
still being completed in July,
production may be nothing more
than guesses until harvest has
started. Basis levels in the U.S. for
soybeans have been very stable
relative to the scenario in corn and
as a result we haven't seen a big
drop in the last month nor are we
likely to see much change until
harvest.
In Ontario, old crop basis has
been quite strong and although the
two crushers have pretty much
covered their old crop
requirements, there doesn't appear
to be too many beans left in country
storage. Old crop basis is currently
sitting at S2.85 over November
futures.
The 1996 soybean crop in
Ontario is looking better but, like
corn, is delayed in its progress.
Basis levels have held quite steady
at 51.95 to $2.00 over November
futures.
FEED GRAINS
Feed grain prices that were
cheap relative to corn one month
ago arc now on par with corn
values. But, because a large amount
of feed grains have already been
booked by feed mills, there
probably won't be much affect on
corn usage.
I've said over the past few
months that markets would be very
volatile throughout thc summer
months. With this last move, that
might have been an understatement
but I still look for a great deal of
volatility until harvest at least.
Remember, futures prices indicate
what traders think will happen in
the future and with so much
uncertainty about crop size and
weather, any news will cause
sudden moves in the market prices.
If you arc nervous about falling
prices, look seriousiy at forward
selling some of your production on
rallies that arc sure to come. At the
very least, you will have locked in
some profit.
My idea of strong prices
throughout the next year have not
changed. Whether or not we've
already seen the market highs is
impossible for anyone to ascertain
for sure but, I think that the futures
market will recover from today's
prices as far as soybeans and new
crop corn are concerned. Take
advantage of the opportunities
when they arc presented. Don't let
greed intcrfcrc.0
lnforrnation supplied by Dave
Gordon, LAC, Inc., I/vde Park.
519-473-93.33.
You have three days in
September to make
some powerful decisions
for your business.
Info: 1-800-563-5441
'96
4
PFARM SHOW
SEPT. 10, 11, 12, 1996
BURL ()RI), ON AR1(
r
AUGUST 1996 15