The Rural Voice, 1998-09, Page 20BODMIN
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
TIGER
Al
AEROPLANE
ST. MARYS. ONTARIO
2844722
Spring Tile Finds
Drainage Mapping
We Provide Professional
Map Packages
• Tile Loans
• Historical Documentation
• Buying or selling a farm
• Existing and New tile merged
into one neat package
• Crop Surveys
• Colour Infrared Crop Surveys
• Precision -farming ready
digitized material
fax (519) 284-0859
e-mail tigerl@execulink.com
16 THE RURAL VOICE
Grain Markets
Bad prices get worse
By Dave Gordon
Grain markets went into a steep
decline in late July and we haven't
seen any recovery. The only grain that
even remotely saw demand was
soybeans. Any rallies from current
prices will be modest at best, and I
believe that we have not seen the
bottom yet in corn and soybeans.
Many people, especially producers,
expect that because prices are so
cheap, they will be rewarded with
higher prices later. That's not
necessarily so. Historically, when
USDA issues a large production
figure in August, subsequent reports
are higher still and right now they are
projecting the largest soybean crop
ever and the third largest corn crop.
Because of generally good weather
world wide, grain production has been
relatively high over the last couple of
years and, as a result, alternatives are
available for any given grain.
CORN
USDA released their first
production report on the 1998 corn
crop and raised production by 225
million bushels over 1997. Many
analysts have trouble with the fact that
USDA also increased their usage
figures given the fact that wheat is
being used heavily in feed rations and
the corn sweetener industry appears to
have reached saturation. The
projected yield has been pegged at
130 bu/acre.
In Ontario, old and new crop basis
levels have finally come together at
65 to 70 cents over December futures.
I expect new crop to lose ground to
old crop levels as we get into
September. There appears to be
enough old crop corn around to meet
the needs prior to harvest and I think
there will be a storage space shortage
in Ontario, especially if the soybean
and corn harvests are short in nature.
For those of you who arc thinking
of holding old crop corn through
harvest and possibly into the new
year, I think you are fooling
yourselves. Yes, the futures market
does show good carry between
months but you can't simply store
your corn and expect to take
advantage of the market. The futures
market is in a definite downtrend and
as the nearby month goes off the
board, the next month in line will
likely fall to the level of the previous
trading month. You need to hedge
your corn in a forward month in order
to lock the carry.
SOYBEANS
The USDA actually lowered the
soybean crop from the previous
report, but also lowered the total
usage. In the very short term some
crushers have had to reach for soys
and as a result, basis levels in the U.S.
and Ontario have been quite erratic.
However, with a record crop in the
field, new crop futures and basis
levels will continue to exhibit
weakness.
In Ontario, one crusher is quite
aggressive in its bids for spot soys
while the other has good coverage. As
far as new crop is concerned, producer
sales have been good and I'm hearing
that producers may sell soys at harvest
rather than corn because of the flat
price. I think producers should already
have any excess soys sold to avoid
selling in the middle of harvest.
Soybean basis is holding fairly
well at $2.10 to $2.15 over November
futures because of the extremely low
Canadian dollar. Who would have
thought the dollar would get down
under 65 cents but now that it is so
low, hopefully we would see a pop
possibly to the 70 -cent area which
would cause the Ontario soy basis to
drop especially in the middle of
harvest.
Producers should keep in mind that
Ontario crushers will be able to use
the vast majority of this year's crop so
exports should be held to a minimum.
If any soys are exported, 1 think it
would happen at harvest when storage
is at a premium.
FEEDGRAINS
Ontario feed grains are having