Submitted by: agcomm,  Thu Nov 20 09:45:32 1997


The Market Advisor:  Supply and Demand Report Made Small Changes
 
George Flaskerud, Extension Crops Economist
NDSU Extension Service
 
     Wheat and corn need to see an improvement in exports before
prices will turn higher. As of Nov. 6, wheat exports were 96
percent of a year ago and corn exports were 69 percent of a year
ago. Price weakness in recent weeks should trigger sales.
(Exports include unshipped sales plus accumulated exports.)
     Durum, barley and soybean exports are a bright spot.
Relative to a year ago, exports as of Nov. 6 were 145 percent for
durum, 327 percent for barley and 113 percent for soybeans. 
     It appears that rallies this fall to $4.10-$4.20 in
Minneapolis wheat futures were selling opportunities. In my
opinion, a return of prices to those levels should be rewarded
with substantial sales. Corn futures prices should still surpass
$3.00. Soybean futures prices will likely continue trading in a
broad sideways pattern until more is known about the South
American crop.
     Small changes in production and export projections for corn
and soybeans were the most noticeable features of the Supply and
Demand Report released by USDA on Nov. 10. The balance sheet for
wheat was left almost unchanged.
     The potential impact of the changes was probably the
greatest for corn. Production was increased by 47 million bushels
and exports were reduced by 100 million bushels so ending stocks
were increased by 147 million bushels. The stocks/use ratio
increased from 8.3 percent in October to 10 percent in November.
That change in the ratio was small, but enough to probably knock
25 cents off the potential increase in corn prices this winter.
The projected seasonal average farm price was reduced from $2.55-
$2.95 to $2.45-$2.85.
     Corn exports were reduced partly because China continues to
export corn. USDA increased China's export projections from 2.5
million metric tons to 4.0 million metric tons. In addition, feed
quality wheat from Europe is competing with corn exports, and
Southeast Asia's corn import demand is possibly being hurt by
economic problems.
     Barley stocks continue to tighten. Feed use was dropped by
15 million bushels but exports were increased by 20 million
bushels. Ending stocks were projected to be 21.3 percent of total
use versus 22.7 percent in October. No changes were made in the
balance sheet for oats.
     Soybean stocks also continue to tighten. A small increase
was made in the production estimate but crush and exports were
also increased. Hence, the stocks/use ratio tightened slightly
from 10.4 percent in October to 9.7 percent in November. The
seasonal average farm price projection for soybeans was increased
from $5.75-$6.85 to $5.90-$6.90. For soybean oil, the projection
was raised from $23.00-$26.00 to $23.50-$26.50.
                              ###
NDSU Agriculture Communication
Source: George Flaskerud (701) 231-7377
Editor: Barry Brissman (701) 231-7866