Category / corn

by Hoosier Econ

30% Drop in Soybean & Corn Prices?

Agricultural stocks have taken a beating just recently and one could speculate recent co mments/numbers0 could have this particular commodity market spooked.
The USDA just released numbers for Indiana and nationally on how yields will play out this fall for corn and soybeans. The plants them self are still in pollination stage, but each week gets us closer to the harvest. Here is what the USDA said via Hoosier Ag:

 In Tuesday’s USDA report, corn production is forecast at 14.0 billion bushels. Yields are expected to average 167.4 bushels per acre, up 8.6 bushels from 2013. Soybean production is forecast at a record 3.82 billion bushels, up 16 percent from last year with yields expected to average a record high 45.4 bushels per acre. Indiana corn yields are forecast to be above the national average.

Indiana is forecast to set a new record high corn yield at 179 bpa with an estimated state production of 1.05 billion bushels, the second year in a row the Hoosier state has produced over a billion bushels of corn. Hoosier soybean yields are forecast to equal last year’s level at 51 bpa which will equal 279 million bushels of production. Winter wheat yield is estimated at 73 bushels per acre, even with last year’s record high. Winter wheat production is forecast at 26.3 million bushels.

With that data coming out, Purdue Ag Economist Chris Hurt says profit margins will be squeezed this year at the annual crop report analysis program at the State Fair.

“The revenues will be down sharply this year; crop farmers’ incomes could fall 25-30 percent.” Hurt predicts that corn and soybean prices will continue to move lower as we approach harvest, “This report will not give us new lows; but, if the September and October reports show an increase in corn yields, we could see new low prices.” Hurt said if the National average yield tops 170 bpa, corn prices could dip as low as $3.20 a bushel.

Shuan Casteel, Purdue soybean specialist and Extension agronomist Dr. Bob Nielsen were also in attendence at the State Fair panel. They stated crops were ahead five year averages and that the crops still have 30-45 days of yield potential despite the cool weather.

by Hoosier Econ

2014 Corn Harvest Depends on Next Sixty Days

While many midwest Americans have embraced the record breaking cool summer(Indiana coolest July since 1895) along with heavy rains, a lot of corn farmers are nervously awaiting the next sixty days in the pollination process of their corn harvest.

Early this month I blogged about Soybean/Corn numbers but more specifically this point

Heavy rains in the cornbelt in June(beginning of pollination) have mostly meant lower yields come harvest.

I even e-mailed an investor July 12th on the East Coast this point on the corn yields with all the rain and cool weather the area has received:

One corn follower said the very wet condition in the cornbelt occuring right when pollination takes off in June has always tilted towards lower yields in the last fifty years.

Now a few weeks later, Indiana Economic Digest published a story of farmers showing the wear of cool/wet weather affecting their corn crops. You can read the story here for full details but will quote some of it for quick reference.

Purdue University corn specialist Bob Nielsen said the cooler temperatures that delayed planting and have continued into the July growing season
“We just had way too much moisture here,” Sutton said. The result is variable heights in corn and depleted nitrogen. “The nitrogen deficiency causes the brown bottoms. … And, with less heat, the corn thinks it’s July 4th.” Sutton said a St. Louis, Missouri-based agronomist his family retained told them, “We have the worst crops in the nation.”

Lower yields than expected will ultimately drive up the price of corn. The pollination process of corn is a wait and see game. Last year ten days made the difference on record number corn/soybean harvest that developed in August. This year may prove a little later.