Some farmers have been harvesting for a few weeks, and others have been itching to get in the field and get some work done. With the USDA’s new numbers of 174.4 bushels per acre corn and 50.6 bushel per acre soybeans, another record crop can be expected.
Soybean yield forecast gained 1.7 bushels from the August report and 2.6 bushels from the 2015 report. On the other hand, corn dropped 0.7 bushels.
The soybean increase comes after an “ideal growing season in August and September to fill out the beans. While that’s a good thing, maturity has slowed down a bit. Farmers could expect to see a higher yield in October of 51 or more bushels per acre.
The drop of corn yield can be attributed to summer heat and pollination issues. Farmers could see issues with tip back and test weight.
Facing a tough farm economy and record crop production, farmers are wondering what to do with their crops—should they be stored in hopes of better prices or sold if the economy goes further south?
“I think you’re going to get worse prices in the next couple weeks,” said DuWayne Bosse of Bolt Marketing, LLC to Tyne Morgan on U.S. Farm Report. “We might bottom out."
There doesn’t seem to be a clean-cut answer when it comes to analysts. With this forecast of falling prices over the next two to three weeks, Bosse advises farmers with high storage costs or high commercial storage to sell it and buy calls.
“A lot of brokers are going to push that because that’s a smart thing,” said Bosse. “If you do that, you just put a floor in the price so all you have is upside.”
There are areas in the country where storage is too expensive with $3 corn prices. Analysts like Jim McCormick of Allendale, Inc. want farmers to calculate the cost of storage to March, April, and May, then consider a money caller or vertical call spread.
There is optimism the demand will improve with both corn and soybeans, especially those, like McCormick, that are bullish. He says both the market and producers are “in denial of how big this crop is.”