A3*—Lancaster Farming, Saturday, August 4,1984
Look into Futures
THOMSON MCKINNON SECURITIES INC.
GRAINS
In the past week we have ex
perienced a small rally in the
grains. This has been due to in
creased activity of Russian buying
and short covering speculators
who are buying back their short
positions on the market. Currently
the market looks to be trading on a
7.8 billion bushel corn crop with
yields projected about 110 bushels
per acre.
Friday, August 10, the USDA will
release its Crop Production Report
and analyst are looking for a crop
of 7.7 - 7.8 bilaon bushels.
The comparison between this
year and 1962 are common.
However, one most acknowledge
that this year’s weather, although
cooler than 1962, has not been as
favorable. The lack of rain to a
large extent has been offset by
temperatures which on average
have been 10 degrees below normal
highs. Some agronomists believe
that under these conditions we can
make do with 60 percent of normal
rainfall. In general, the crop
continues to improve each week
with most states increasing their
acreage in the good to excellent
category.
Several interesting develop
ments have occurred recently in
the grain markets. The Russians
are baying com as if it were going
out of style. We find this par
ticularly interesting since there
are projections for price to drop
another 30 cents. Normally the
Russians buy grain when either the
price of grain is cheap or the price
of gold is expensive gold being
their major form of funding in
ternational trade. Their premature
trade activity strongly indicates
that they have a crop problem on
their hands.
It is particularly characteristic
of the Russians to lie whenever it
can be to their advantage.
Recently a Soviet official said that
Hi-Protein Breeders
doesn’t want a thick shake, a
flavorful glass of cold milk from
the jetshake machine has a greater
chance of replacing that can of
soda that is so easily reached.
The Hi-Protein Breeders en
courage all dairymen to join their
organization and further their
SNOVUtIHV
FB 99 Gehl Forage Blower
CB 1000 Gehl Forage Harvester w/2 Row
Head & Pickup Attachment
MX 135 Gehl Mix-All w/Scales
DC 1080 Gehl Mower-Conditioner
BU 640 Gehl Forage Wagon
(2) BU 960 Gehl F r W
(800) 336-0241
grain buying was not related to
their crop size, rather that the
buying was related to their in
creased grain storage capacity
that they went to utilize. Further,
he said that U.S. farmers should
not be misled by recent activity
and that “next year the USSR may
not be back buying US grain in
large quantities”. One can only
conclude that the Russians would
prefer to see the price continue to
go down so that they can make
further purchases at a lower price.
The overall export outlook looks
poor despite proclamations to the
contrary that were recently made
by the USDA. Some people are
getting excited about wheat since
recent export pace has picked up.
A closer analysis of the situation
shows that except for recent
Chinese buying, demand for soft
red wheat is rather slack. Fur
thermore, if the Chinese wait until
1985 to take the balance of their
long term agreement, there will be
little effect cm this year’s prices.
One should be aware of a little
known clause in our long term
agreement with China which says
that they can reduce US purchases
provided they reduce purchases
from other countries propor
tionately. In light of China’s recent
record wheat crop, and their
refusal to make further purchases
from major suppliers like France
and Canada me could expect the
Chinese to utilize the above
mentioned loophole if their backs
were against the wall. We can
never trust the Communists to do
us any favors when it comes to
money.
One bullish factor in the wheat
market is the increased amount of
red feeding. Last year’s initial
resistance to feeding wheat has
now been overcome and with that
experience livestock people are
increasing their wheat in the
rations. The future market does
not really reflect how cheap cash
(Continued from Page A 36)
efforts. Anyone interested in
promoting a higher quality product
can contact Hollenbach or William
Zollers, Mertztown, president.
Members of the organization will
also be available at the Kutztowii
Fair to answer any questions and
show off their new purchase.
5859 Urbane Pike
Frederick, Md. 21701
wheat is.
Another potentially bullish fact
in the wheat market is the free
stocks situation. With 38 million
bushels in the CCC and 15 million
bushels more to be entered, free
stocks could be down to 20 million
bushels. Although the general
fundamentals are very negative
for wheat (with Russia the only
country with crop problems), there
is little upside potential in the
wheat market.
So far this year the Russians
have taken 5 million metric tons
with the possibility of taking
another 3 million metric tons.
Even if they take the full allotment
of their port capacity, one cannot
expect the price to move above 3.80
in wheat and 3.00 in com. That is
why the price has not significantly
rallied even though the Russians
continue to make large purchases.
Indicative of the poor world
demand situation is the fact that
Brazil has been unable to ship
soybean meal at prices that they
can consider acceptable. They are
lowering their price. Since the US
is a residual supplier of soybean
products, right we will only be able
to export so long as we give sub
sidies. Even though soil stocks
remain low, one cannot get very
bullish about soybeans and
especially soybean meal. Some
analysts expect soybean meal to
reach $135.00 ton by the end of the
year.
In general, the overriding tone to
the market is negative and we feel
that any rallies should be used to
lock in prices. The futures market
is an attractive place to do this
since one can lift a hedge as a
farmer feels that the price has
either reached bottom or is ex-
Jr. Holstein sale set
ITHACA, N.Y. - The New York
State Junior Holstein Association
will be sponsoring the first Junior
Progress Sale at Empire Farm
Days, Tuesday • Thursday at
Holcomb, N.Y. The sale will be
held in conjunction with the Senior
Holstein Association’s Bull Sale.
There will be nine February and
March calves offered for sale over
the three days. On Tuesday, Aug.
7, all sales will be limited to people
21 years of age and under. Each
completed sale will include one
quality Registered Holstein calf
and, also, a one year’s paid
membership in the New York State
PUBLIC AUCTION
Tractors & Horse Drawn Farm
Equipment-Supplies-Small Items
SALE OF SMALL ITEMS 9:00 A.M.
NOTICE
Late Consignments Just Received
See Page D3O
For Full Listing
10’ Little Britain Spring Harrow, like new
Top Buggy, good condition
Ground driven corn binder, good
#9 7’ NH mower, new
HG Crawler and spare parts
6 front end suitcase weights for
Tractor
Bearcat Grinder-Mixer
IH 12’ Harrow
Zimmerman Sprayer
Rotary Hoe
Schmidley hog feeder
MF trailer mower
pected to move higher. We are
always willing to discuss farmer
marketing strategies with those
who are interested in learning
about the futures market.
We are finally starting to see a
little bit of strength in the livestock
market. The extreme barrishness
in the market appears to have run
its course as the market has
already discounted talk of
livestock slaughters to come
155,000 in the cattle and 320,000 in
the hogs. With the discounts of the
futures to cash at more managable
levels, one would expect the
market to trade sideways and find
support over the next several
weeks.
The cattle market is still con
cerned about the large second
quarters placements which will be
coming to market in the next two to
three weeks. We need to have these
animals moved through the
market in order to clean up near
term supply thereby setting the
stage for a longer term rally. We
would think tint the heavier the
slaughter is now, the better the
price prospects will be for fourth
quarter marketing.
Poultry and beef remain the
main retail features with pork only
evident about once a month. One
cannot expect the retailers to
change this anytime soon since
they have been making money in
chicken and hamburger and have
had continued problems moving
pork products.
If the recent support in grains
holds up for any significant time,
one would expect the back months
of the hog and cattle markets to
stage a rally. But if grains break.
Junior Holstein Association. On
August 8 and 9, the sale is open to
all interested buyers, on a first
come, first buy basis, until all
animals are sold. Some reserve
calves of equal quality have been
selected in the event all the calves
are sold after the second day.
The calves are sired by proven
bulls and the dams are scored
Good Plus or better, with at least a
GP Mammary. The dams of the
calves have 19,000 lbs., or greater,
ME milk records.
Although this sale is geared
toward youth, young dairymen
New Holland Sales Stables, Inc. sSSI
MW IMIM, "I fMjM&K,
FRIDAY, AUGUST 10,1984
MF
one could expect these contracts to
fall very hard “cheap feed
makes cheap meat”.
Adding to the problems in the
bog market, has been the large
frozen stocks of pork bellies which
has been a blade doud over the
market for many weeks. It is
encouraging, however, that many
packers who were shut down
recently, have come back into the
business. Clearly they feel that the
cash price has found some support
and can begin packing again with
limited down side risk. We would
expect cash hogs to find good
support in the 53.00 area. Slaughter
weights have been craning down
which indicates that feeders are
current and will not encourage a
back up of animals. Despite the
projected large slaughter for the
third and fourth quarters of this
year, we feel that the market has
already discounted this in
formation and a rally if only
short lived, should be experienced
later this summer in the hog
complex.
Since cash forward contracts are
very difficult to comeby in the
livestock market, the futures
market provide a good opportunity
for farmers to lock in profitable
selling prices with fairly cheap
feeder pig prices and prospects of
cheap grain in the fall. Many
farmers have already successfully
utilized the futures market to lock
in large profit margins for the rest
of 1984 and the first half of 1965. We
would encourage both grain and
livestock fanners to increase their
marketing knowledge by studying
and introducting themselves to the
futures market.
in N.Y.
interested in getting
Registered Holsteins are also
encouraged to visit our tent at
Empire Farm Days. The calves
will be reasonably priced, as set by
the consignor, and will be a good
buy.
The sale will be conducted by
Junior members and will give
them experience in merchandising
Registered Holsteins.
For further information on the
Junior Progress Sale, contact the
New York Holstein Association,
P.0.«80x 190, Ithaca, New York
14851 (Phone: 607-273-7591).
FARM EQUIPMENT 10:00 A.M.
JD #336 Baler
Woods 3 pt. Mower
Lely Hay Tedder
NH #477 Haybine
NH #476 Haybine
MF 3 pt. Mower
JD KBA Disc
Brillion 8’ Seeder
NH tandem hay hitch
Farmall A T ractor w/cultivators
JD 216 Tandem axle Forage Wagon w/roof
Ford Jubilee
Farmall 656 Diesel Tractor
Cadet 102 Lawn Tractor
NH 8 h.p. Lawn Tractor
JD 110 Lawn Tractor
Bohlens 10 h.p. Riding Mower
Dinamar Riding Tractor