Bin or sell this fall?
Is the corn bull run over? Some analysts say it is, something that could be confirmed by the number of farmers with 2011 and 2012 grain already forward-contracted.
But, there's a lot of bin space empty heading into harvest. So, despite continued worries about demand falling and eroding prices, there's still some upside potential in the trade, farmers say. And, the way the storage situation is shaping up so far this fall, that's not too bad of a thing.
"In the short term when farmers get done harvesting, they will lock the bins up here in Iowa. They have enough cash and enough forward contracted and enough deferred to say they will wait on bigger prices, until next spring," says Agriculture.com Marketing Talk senior contributor idalivered. "Our local elevators are so empty and all the farm storage is empty and we don't have a great crop so there is definitely adequate storage to hold us. I mean, these elevators are down to way lower inventories than normal for pre-harvest. coops are literally empty of soybeans, too."
Cargill senior grain merchandiser Ray Jenkins says that's about right. Thus far, harvest is starting out swiftly in Iowa, especially near his facility in Eddyville, and as the pace picks up further, cash grain basis levels could feel it.
"Barring a lot of weather issues, I am expecting Iowa corn harvest to be history by end of October this year, and that creates a pretty big hole for the processor to cover before the calendar turns to January 1," Jenkins says. "Will be interesting to see if we can really get to wide basis levels during harvest, or will everyone be aggressive to fill their available space...I'm expecting a pretty big snap in corn basis during November this year...in fact, some of the best early/mid-winter basis selling opportunities may develop by mid-November. Get ready to do that bin-coring a bit sooner than you might have expected!"