Markets have plenty to chew on
Though the U.S. is looking at a late harvest, both the market and farmers have a lot to digest in the coming weeks and months. As the corn and soybean crops head toward the middle of August, the consensus is that the soybean crop could be headed for a record, and the nation's average corn yield could be above average.
To be sure, the market's optimism for big crops showed up in July, as corn finished the month 14% lower than June, soybeans fell 16%, and wheat dropped 5%.
For corn, the month of August has not been much friendlier for prices.
Throughout the Corn Belt, some farmers are reporting fundamental factors that would be price-supportive such as pollination problems, nitrogen loss, lack of moisture, and fewer growing degree days. But the question remains: Are there enough of those spots to lower the national yield estimates?
Other lingering questions include: Will the corn and soybean crops reach maturity before a frost hits this fall? And even before that, will the needed moisture to finish crops arrive in late August? Pollination did occur, allowing the grain-fill process to start. But with nitrogen loss reports and lack of sun and rain, will the ears fill out?
Beyond the agronomics, there is a pile of marketing questions building for this 2013 crop. For instance, with some analysts looking at downside new-crop corn prices as low as $3.50, how do farmers position their marketing plans ahead of the expected falling market?
If there will be more storage in a decade, as reported recently by some analysts, will the market pay you to carry this crop until next spring or summer?
If you're a farmer, is it time to revise your marketing plan? Are you prepared to react to lower fall markets, compared to the last three years' offerings?
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