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Tuesday, August 16, 2016

Store a Big Corn Crop

ifr160819–184
Store a Big Corn Crop
Darrel Good, Agricultural Economist - University of Illinois

Farmers are wondering when corn prices will bottom. Todd Gleason has some insight from the University of Illinois.

Last Friday the United States Department…
1:58

Last Friday the United States Department of Agriculture released the first fall harvest Crop Production report. It showed a very big number for corn and for soybeans. It surprised the market a bit. However, Darrel Good says the market handled the 15 billion bushel plus corn crop very well.

Good :20 …that what is now being projected.

Quote Summary - They really did. We saw an initial drop in prices that was pretty sharp, but with some recovery as the day went on. I think the market is thinking that perhaps with the late season weather that the yield may actually fall just short of the USDA projection giving us a little tighter balance sheet that what is now being projected.

There is more yet to be discovered about the size of the corn crop in the United States as we move into harvest and USDA updates the Crop Production reports in the months of September and October. For now it appears the market may be headed for an early harvest season price low rather than a late one says the agricultural economist.

Good :14 …for putting a bottom in the cash market.

Quote Summary - I think an early low in the market, perhaps around the September Crop Production report to see if we verify this number or not, would probably be a prime time for putting a bottom in the cash market.

The question now on the minds of many farmers is just exactly what do they do with a big crop that is not worth a lot of money. The market, Darrel Good says, is telling them in a small way to go ahead and store.

Good :14 …I think storage is the way to go.

Quote Summary - Yeah, it is not a huge signal. The basis in Illinois is pretty strong, there is not a huge carry in the market, enough to pay on farm storage, and with prices at the level that they are I think storage is the way to go.

No doubt University of Illinois Agricultural Economist Darrel Good with flesh out that idea in one of the Weekly Outlooks he posts to the FarmDocDaily website. Those come up each and every Monday afternoon. You can find it at farmdocdaily.illinois.edu.