It wasn’t that long ago when farmers were seeing $6/bushel corn. Now, prices have dropped below the $4 mark, leaving many to wonder what they should do with their crops this fall. During an appearance on U.S. Farm Report, Bob Utterback of Utterback Marketing said $4 corn “looks a long ways away.” There could also be the possibility of a poor market going into 2017.
“Prices could see lower levels next fall, [then] banker pressure will take acres out of production,” said Utterback.
Many farmers have taken off all their hedges, and they’re keeping the corn in the bin unpriced. Some analysts think these farmers are hoping for a seasonal bounce from now until next year. You might want to think twice about dealing with your crop between January and March in case Brazil has a good crop.
On the other hand, soybeans aren’t exactly in good shape either. One of the United State’s biggest competitors, Argentina, are feeling frustrated with government officials. Farmers are tired of the government moving so slowly with changing the export of beans. As a result, they are growing more corn.
Another country growing more soybeans instead of corn is China. As the world’s largest importer of soybeans, China plans on growing more soybean acres than corn. In the 2016-17 marketing year beginning Oct. 1, the country will import 3.197 billion bushels. According to Utterback, this isn’t as big an issue as first thought.
Argentina, China’s third primary supplier of beans, could have a large impact on markets. Weather is the biggest determining factor. Right now, it isn’t known if Argentina will have a El Niño weather pattern or another weather problem. If that happens, Utterback predicts a good bounce in either February or March. If Argentina has a good crop and excellent weather, exports could “fall off the cliff” and China could shift it’s needs to South America.
On Sept. 30 at 3 p.m., NASS is set to release its grain stocks report. Rich Nelson of Allendale, Inc. believes this report could give farmers ideas of what’s happening. When the USDA does a survey of grain stocks, they make the production numbers to fit the overall numbers, making the final ending stock work. In terms of soybean stocks, there might not be any major changes. On the flip side, corn could drop 2.3 billion bushels.