The Rural Voice, 1998-01, Page 21Grain Markets
much better than we thought it
would be back in September, it is no
better than normal. A much larger
factor in the Ontario markets is the
amount of U.S. corn that has come
into the province. The basis levels
in Ontario through November were
well above import prices because of
slow producer selling and as a
result, com was imported to fill
users' needs. This extra quantity of
com is now weighing heavily on the
market. Basis levels have dropped
in the face of a low Canadian dollar
and if the dollar stays under
pressure, Ontario corn is exportable.
As I've said before, the Ontario
com market will generally go from
import levels to export levels and
back again and this is the scenario
that I see for 1998. Some time next
summer, I feel basis levels will
recover because we always seem to
overbuy or oversell and right now,
Ontario is overbought.
SOYBEANS
The USDA changed absolutely
nothing in the latest supply/demand
report which was not a surprise.
Even with excellent export sales and
domestic crush, futures prices have
started to fall and are now under $7.
It appears that good weather in
South America has the soybean crop
there off to a good start. Even with
strong demand, a good crop in
South America will likely push
prices down further.
In Ontario, the soybean crop has
been harvested and the final
production appears to be over 85
million bushels. Exports out of
Ontario are lagging but this may not
pose a problem because domestic
crush is well ahead of last year. The
only glitch may occur if the balance
of producer sales are not spread out.
Basis levels are not as strong as
they were one year ago, but
considering the size of the crop, we
are still relatively good. Consistent
selling by producers will be the key
to holding basis levels steady in
U.S. funds while the Canadian
dollar will obviously affect the basis
in Canadian funds. One thing to
keep in mind is that both crushers
may swing to crushing canola this
winter which would reduce the soy
crush. Just another factor that can
affect the basis.
FEEDGRAINS
Westem feed grain prices have
eroded slightly and once again
cannot compete with com prices.
Western feed wheat is selling for
$191/mt while western barley has
dropped to $159. At the same time,
Ontario barley is trading for about
$140/mt.
Com basis levels are following
the pattern that I expected after
going through the harvest in Ontario
well above import prices. History
tells us that when this happens at
harvest, basis will either drift lower
for the next year or drop abruptly
and put us into an export position.
The latter seems to be what has
happened this year.
Corn futures prices have drifted
farther down than I originally
thought, but now, with exports to
the Pacific Rim sliding, the market
will need weather problems (El
Nino) to put any strength back into
it.
Soybean prices have remained
strong throughout the fall and
producers have had opportunity to
sell at more than $9. Right now, the
futures market is reacting to the
good weather in South America, but
there could still be some
opportunities for slightly higher
prices during the winter months.
Higher prices, though, will
encourage more acres in 1998.
Many producers still don't
understand the difference between
greed and good sound marketing.
When producers start talking about
"beans in the teens" and $6 or S7
corn, you know that greed is
talking. This also shows that there
is no marketing plan in place. I
know readers won't see this column
until 1998, but I hope all grain
producers will develop a marketing
plan as part of your new year's
resolutions.0
Information supplied by Dave Gordon,
LAC, Inc., Hyde Park, 519-473-9333.
BODMIN
SWINE GENETICS
• BOARS • GILTS
All Stock Delivered
Boar Store - viewing
area located just east
of Belgrave
RR #5, Brussels, Ont. NOG 1H0
OFFICE
Phone: 519-887-9206
Fax: 519-887-9880
(Evenings)
Phil Smith 519-764-2898
Rick Beunen 519-631-2341
HCRAIG HARDWOODS LIMITED
Auburn Ont 519-526.7220
BUYING
Let 5 Generations of Experience in Timber
Purchasing and Resource Management
$ WORK FOR YOU $
Remember - "Good Things Come in Trees"
Hardwood Slabs
$130/17 cu. yd. Truckload
within 20 miles
Mileage Beyond that
BOYD FARM
SUPPLY
• Snowblowers
• Gates & Panels
• Head Gates & Chutes
• Bale Feeders
• Portable Loading Chutes
• Cattle Oilers & Rubs
• New & Used Farm Machinery
RR 6, Owen Sound
519-376-5880
JANUARY 1998 17