The Rural Voice, 1987-08, Page 30Miller's Painting
& Renovations
barnpainting, sandblasting, renovations
R.R. 1, ELMWOOD, ONT.
NOG 1S0
LESLIE 519-369-3648
STEVEN 519.369.5568
WALLACE 519.363.3014
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KEITH SIEMON
FARM SYSTEMS
R.R. 4 Walton Clinton
519-345-2734 519-482-7971
28 THE RURAL VOICE
MARKET UPDATE
The weather market has returned. Ho
dry weather has been widespread across
the corn belt, with forecasts for more.
Few think the crop has been seriously
hurt but some are beginning to doubt the
prospects for a record yield. The August
Crop Production Report will be very
significant. While the crop generally
looks good and state crop reports show
good to excellent conditions, the effect
of early stress may not be visible.
Ear size will be an important yield -
determining factor, even though polli-
nation was generally successful. Lack
of near-term export sales and signals
that the CCC is trying to reduce stocks
before harvest kept prices in check.
Crop prospects will be the primary focus
in the market for the next several weeks.
CCC sales policy will be important as
well.
While overall fundamentals are not
much different from a year ago, there are
some potentially important differences.
Demand prospects are a bit better, and
the surplus will apparently decline rath-
er than increase. The USDA's supply
and demand projections released July 9
showed ending stocks down a total of
261 -million bushels from the previous
month. Planted acreage estimates for
June 1, 1987 list corn acreage at 66.0 -
million acres, down from the March 2,
1987 projection of 67.5 -million acres.
Both exports and domestic (especially if
you believe the hog expansion) use
should continue to hold.
LOCAL CORN BASIS:
A slight easing in the local corn basis is
being felt due to lower values for both
new crop local grain and lower priced
Western grains. There appears to be
limited demand locally pending a deci-
sion on the countervail, and export de-
mand is nil as our basis is too high to
compete with U.S. values.
The hot weather and conflicting fore-
casts are creating more volatility in
soybeans than in corn. While state re-
ports show good to excellent conditions,
the crop is entering the critical pod -
setting and filling stages in many areas.
Old crop prices are not holding as well
although good export demand and tight
pipeline supplies have been noted. Per-
sisting rumour of the possibility of a
marketing loan program for the 1987
crop has prevented as much pressure on
new crop futures. Once again the
strange rules surrounding the announce-
ment of the CCC soybean loan rate are
creating confusion.
Difficulty receiving soybeans out of
Brazil continues to divert business to the
U.S. With only a few weeks left in the
marketing year, cumulative exports are
only 14 -million bushels below the
USDA projection of 700 -million bush-
els. September 1 stocks could be under
520 -million bushels.
The August Crop Production Report
due to be released on August 11 will
provide the first sound assessment of
1987 production potential. Prices will
likely remain choppy until then.
LOCAL SOYBEAN BASIS:
Due to ample stocks available and the
decline in the Chicago futures price, the
local basis has come under considerable
pressure in both old and new crop. The
strong Canadian dollar has also aggra-
vated the situation.
As in corn and beans, recent lows should
hold for the time being, with prices
consolidating and an attempt at a rally
expected for early August.
The Winnipeg canola market, because
of its protein and market contribution to
the end user, follows the soybean mar-
ket very closely. Basis levels remain
low.
WEATHER U1 ;:DA1
Record high temperatures exceeding
100 degrees in places are pushing east-
ward and may mark the peak of this
summer's warmest weather. Moisture
from the Gulf of Mexico is likely to
follow into the main production areas of