Joe Victor is a Business Development Specialist with Minneapolis Grain Exchange, Inc., where he monitors cash grain activity and cash grain opportunities. He provides marketing advice through this blog.
You be the Judge
Dec 28, 2009
USDA has released its last corn harvest progress report for 2009 and suggest 95% of 18 states which harvested 94% of last years corn production is complete. Within the National Agriculture Statistic Service’s report are a few surprises, one of which is how the harvest progress report for 2009 exceeded the average last release date of 5 weeks ago. That is correct, normally when the nation has reached a five year average of 89% five weeks ago, this year the harvest was only 54% complete.
This year the U.S. is expected to produce 12.921 billion bushels of corn which remains only second in size to the 2007 record size of 13.038 billion bushels. With 95% of the corn production harvested, this suggests there remains 621.6 million bushels left in the field as of the last NASS report. Only in 1985 and 1992 did NASS release late reports which suggested the harvest was 91% complete in 1985 and 88% in 1992 when for the same week in 2009 corn harvest was 92% complete.
Who has the most corn remaining in the 2009 field may come as a surprise in the form of 110.9 million bushels in Nebraska and then Illinois at 103.2 million bushels. These are the only two U.S. states with over 100 million bushels remaining to be harvested. Other significant others which bear noting are Minnesota at 85.5 million bushel, South Dakota at 82.8 million bushel and North Dakota at 67.8 million bushels. Interesting to note of the five major players which have significant amounts of corn remaining in the field four of them are in the west/northwest cornbelt. You may anticipate the corn basis to remain stronger than usual and into spring for these four western states as there remains an abundance of unharvested 2009 corn.
2009’s corn harvest remains delayed and yet it is very important to remember as we prepare to enter the beginning stages of 2010 this is not a market which is demand driven such as soybeans but corn is a market which is supply restricted. Of the nearly 622 million not harvested, approximately 10% or 60 million bushels are expected to be lost as a result of field loss. The only true demand driver for corn is the ethanol market
as profit margins remain positive. Allendale Inc believes USDA is overstating feed and export demand.
U.S. corn producers and end users make note March corn futures prices remain in a range of 3800 to 4200, July corn futures 4000 to 4400 and in full carry mode of 19 cents.
You be the Judge, are you anticipating higher prices to sell into and because driven by demand or supply restriction? Why are futures offering full carry and do you believe exports and feed use will be as strong as USDA believes? Do you have your marketing plans firmly in place?
We welcome your questions and comments.........Joe Victor
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