The Rural Voice, 1987-04, Page 34FINANCIAL CENTRE
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32 THE RURAL VOICE
COMMODITY WATCH
Prices as of the
market close,
March 17, 1987
Corn
For the first time since the October
1986 Commodity Watch, I am pleased
to say that com markets have actually
advanced over the course of the month.
July corn closed at 1.65 1/4 on March
17, an improvement of 9 cents from
levels of a month previous. Among
the positive fundamentals in the mar-
ket are:
• a positive USDA supply -demand
balance report
• a lack of U.S. farm selling
• a lessening of U.S. generic PIK
certificate sales
• a perception of USSR export interest
in U.S. corn
The one-shot bonus conservation pro-
gram was disappointing, with only 3
million acres to be taken out of produc-
tion versus expectations of 5 to 7 mil-
lion acres.
**HEDGERS** should be familiar
with seasonal price tendencies m the
grain markets. The March/late June
time frame often presents farm market-
ers with excellent early selling oppor-
tunities. Keep the 1.82 loan rate in
mind while watching December corn
prices. Holders of stored com might
consider the purchase of July com
PUTS to hedge values if the market
begins to lose steam.
Soybeans —
Oilseeds markets held steady to firm
during the month with July beans fin-
ishing at 4.88 1/2 on March 17, a gain
of 6 1/2 cents over levels of a month
previous. Positive factors include:
• Brazilian ship crew strikes creating
concems of export capacity
• lack of U.S. farm selling
• good weekly U.S. export and crush
rates
• perception that the U.S. loan rate
will not be lowered
Negative factors still might influence
this market; they include:
• excellent harvest conditions in South
America
• expected heavy cash sales by
Brazilian farmers
• soybean meal price weakness
• negative USDA supply -demand
balance as well as a negative carry-
over figure
**HEDGERS** have surely no-
ticed the deterioration in Ontario board
prices on beans due to lack of domestic
usage and rising Canadian dollar cur-
rency values. Long Canadian dollar
hedges via either futures or CALL
OPTIONS might be appropriate. Sea-
sonal selling opportunities might arise
in the April/May time frame.
Live Cattle —
The month has shown us some wide
trading swings, with some cattle con-
tracts recording contract high levels
and subsequently incurring sharp pull-
backs. June cattle closed at 62.22 on
March 17, a gain of .42 points from
levels of a month previous. The most
recent Cattle on Feed Report, released
on March 16, indicated the following:
Cattle on feed
Placements
Marketings
down 3 per cent
(in line with est.)
up 15 per cent
(higher than est.)
unchanged
(in line with est.)
The reaction of traders was neutral to
negative as the placements figure was
higher than estimated, but ironically
market activity the subsequent trading
day took prices hic,her. Strength in
cash markets has lent futures rnarke•