Market Running Out of Steam...or Not? - Tuesday, 14 August 2012

The offices in Buffalo Center and Albert City have been busy preparing for our annual Agronomy Plot Tour.  The plot tour will begin at 4:00 p.m. followed by an evening meal.  Our sales staff and vendors will be available to visit with you and answer any questions you may have.  So please mark your calendar and make plans to attend, in Buffalo Center, Wednesday, August 22nd and in the Albert City, Thursday, August 23rd.  Please call your local office for more details!

Is our corn market running out of steam?  Over the weekend most of the Midwest received at least ¾ of an inch of rain and the 6-10 day forecast is calling for normal to below normal temperatures, both of these all adding pressure to the grain markets today.  Everyone is well aware that the corn crop is not going to be good, that is old news and is no longer adding momentum to the grain prices.  The next source of information to spur the market (either higher or lower) will likely be harvest news.   August 30th, 1987, has held the record for the Earliest Harvest Data thus far since records have been kept; this year’s harvest data is expected to begin very soon, with some experts thinking it could begin as early as this week.  Actual yield results will vary significantly from one field to another but the market is expecting to see the lowest yields since 1995 with corn expected to average 123.4 bu./acre and soybeans 36.1 bu./acre based on the August USDA report released last week. Bob Utterback, president of Utterback Marketing and economist for Farm Journal points out that "this is one of the years we will always talk about in the future. We are living in history," he says. This year, Utterback does not rule out $9 to $10 cash corn, if yields are 130 bu. /acre or lower.  "This is a year when greed is difficult to manage," he said. "Keep your greed under control." Volatility could be huge, in the order of $2.50/bu., he said. It’s not unprecedented, however in 2008; corn prices dropped $5/bu. from July to fall. 



Crop Progress









This surreal-looking soybean field near Dayton, IN in Tippecanoe County is a victim of the 2012 drought that started in the spring and worsened into the summer. (Purdue Agricultural Communication photo/Tom Campbell)



 This year is going to be one for the record books and not necessarily in a good way.  Many growers are going to have crop conditions that will require them to make a claim, and most likely will result in them getting an indemnity payment.  Please contact Mike or Sheila if you would like to discuss possible payments based on projected yields.  The projected payments depend on what level of insurance you took and what options you chose.


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