Producer Talk From the Road
Mar 15, 2010
Last week was my last road trip for a while. I’ve appreciated all the comments I’ve received from producers about how they enjoy the "U.S. Farm Report", Farm Journal and UMS daily electronic comments. Thanks for all your kind words and encouragement. UMS is committed to helping you do the very best possible to assist you in marketing grain and livestock.
Some of the concerns regarding the markets that I have been picking up include the following:
- Producers still have a lot of old crop corn to price and move. Many say this crop is not going to store very well. As for old crop beans, it appears we are [overall] in good shape.
- A lot of producers intend to dump bad corn before planting. This should cause basis to get very nasty during the next 45 days. While there will be some pressure on flat price, I fear most of the weakness will be in cash prices with basis and basic discounts.
- I did not really hear any discussion about a big acreage shift. The biggest concern is so much field work has to be done and things are still really wet in the Midwest. While I believe most producers would like to plant corn, Mother Nature is really going to determine how many acres will get planted.
- I was on a program with Mike McClellan with Mobile Weather Team located in Illinois. He seems to have a solid handle on weather. His summary comment was, the biggest problem will be getting the crops out on time. If it gets planted, overall a better growing condition year will be seen this year. Before his presentation I would have argued an average 161 bu. per acre crop yield. I now have to suggest 166 bu. to maybe even 168 bu. per acre.
- Finally, in regard to acres, I’m guessing most producers will plant corn, if possible; but they are preparing for beans as well. Since crop insurance is at $9.23, it’s going to encourage interest in beans.
Summary: It appears the old crop has a lot of problems; it’s going to be difficult keeping prices very range bound. We may get a slight price rally into April/May because of delayed plantings, but with the weather outlooks I’m hearing potential for another big crop this year is increasing. I have to say right now that December 2010 corn is going to have a really difficult time getting back to $4.15.
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