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 Logan County crop production is all about corn and beans. The
county yield for both crops wildly broke all records this past year,
and it follows a record year for corn in 2013.
Not only have we had bumper crops two years in a row, but there are
more U.S. acres now planted as corn and soybeans - 8 million more
corn acres and 12 million more soybean acres were harvested than in
the 2005/06 market year.
The increase in U.S. corn and soybeans acres in part is seen from a
reduction in Conservation Reserve Program acres that are now
planted; and more of that increase is seen from parts of the country
that have moved away from traditional crops - wheat acres in the
Northern Plains; rice, peanuts and cotton of the Southeast and
Southern Plains, and now put in corn and soybeans.
At the elevators the margin is slim, but this year’s volume is
plenty, and that helps make up for the low prices. Troy Bauer at
Hartsburg Elevator said, “We're still pretty full even though we've
been moving corn all winter.”
Bauer believes that exports have been decent, but that they could
have been better if the Ukraine corn hadn't been so darn cheap,
“Cheap corn on the Black Sea Region has made ours uncompetitive.”
Allen Shew at Chestervale Elevator commented that he thinks the
agricultural industry has been doing things backward when it comes
to GMO’s. He would like to see the seed companies work with other
countries product regulations before the release of new seed.
Shew ships most of his grain to Archer Daniels Midland Company in
Decatur. ADM has been an active participant with the U.S. government
working out trade agreements with China and other countries.
This year’s efforts have led to China accepting three top corn and
soybean GMO’S, including Viptera, the corn that was rejected a year
ago. There has also been acceptance of DDG’s, a corn by-product
created in ethanol production that is used for livestock feed.
Another factor influencing corn is the development of the ethanol
industry. The corn demand for ethanol has reached a high plateau of
five billion bu. Bauer said, “Pretty much all of our corn goes to
ethanol.”
Bauer points out that “We're in a large supply, limited demand
picture” and that means low prices. He knows that farmers are
selling because they have to, not necessarily because the price is
where they'd like it.
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He and others would tell you, numerous outside influences affect the
grain market that no one can predict, impacts far beyond the local
markets; what global trade, and even the dollar might do, can change
everything. So, this year’s story isn’t over yet.
Bauer plans to watch the board, work the rallies and watch for the
new corn price. The game now is, “if you can find a price that is
break even or better, put some sales on at that level.”
He says there could be some wild cards, “if we were to have a wet
spring and crops go in late, the corn prices could rally a bit. On
the other hand, if we get the crop in on time and it’s in good
condition, that could depress prices further yet.”
In summary he encourages those waiting to sell to, “Watch the
futures market for new crop sales. Don't be afraid to price corn
ahead. Try to find prices you can live with on new crop sales. We
may have missed the highs already. Be ready to take advantage of the
rallies when they happen. There may be some opportunities to break
even or better between now and harvest.”
Sources
Changing Landscape of Corn and Soybean Production and Potential
Implications in 2015
Can One Monster Crop End the New Era of Grain Prices?
Corn
Trade
Past related article:
Are GM seeds hurting the market?
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