Submitted by: agcomm,  Thu Dec 18 12:35:24 1997


The Market Advisor: USDA Report Generally Supportive of Prices 
 
George Flaskerud, Extension Crops Economist
NDSU Extension Service
 
     The Supply and Demand Report released by USDA on Dec. 11 was
considered neutral to the market but continues to signal higher
prices forthcoming, with a major qualifier: if the projected
exports materialize. Corn, soybean oil and sunflowers hold the
most potential. 
     The fundamentals for wheat suggest that its price will
continue to be a follower of the corn price. Ending stocks of
wheat were reduced by 5 million bushels at the U.S. level as a
result of a reduction in imports, but they were increased at the
world level by 52 million bushels as a result of increased
foreign production which more than offset a projected increase in
global feed use. The projected seasonal average farm price was
left unchanged at $3.40- $3.70.
     The balance sheet for corn continues to point to higher
prices in the spring. However, the concern is exports. USDA cut
projected exports by 50 million bushels due to increased
competition from Eastern Europe. Even after the cut, the pace of
exports will have to increase for the new projection to be met.
U.S. feed use is very strong, and a 25-million-bushel increase
helped to offset the cut in exports. The seasonal average price
was reduced by $.05 at both ends of the range to $2.40-$2.80.
     The supply and demand situation for barley deteriorated,
offering little hope for the feed barley price to do anything but
roughly follow the corn price. Projected feed use was reduced by
10 million bushels, which was partially offset by a reduction in
imports. The price range was reduced by $.05 to $2.30-$2.50. The
situation for oats was left unchanged. 
     The May soybean futures price should find support around
$7.00. The situation for soybeans remained unchanged in the U.S.
Also, the stocks/use ratio remained unchanged at the world level;
an increase in production was offset by an increase in crush. The
projected average price was increased from $5.90-$6.90 to
$6.20-$7.00. 
     The report supported the normal seasonal price pattern for
sunflowers, which is for higher prices into May, partly because
sunflower seed production was reduced in the former Soviet Union.
Although a large crop is expected in Argentina, which tempers the
price outlook, edible oils stocks are expected to tighten as the
year progresses. The average soybean oil price was increased by
$.50 at both ends of the range to $24.00-$27.00.                  
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NDSU Agriculture Communication
Source: George Flaskerud (701) 231-7377
Editor: Barry Brissman (701) 231-7866