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Purdue University agricultural economist Chris Hurt has this timely advice for central Indiana farmers.
Sell soybeans soon after harvest to capture high prices before they evaporate, he suggests, but store as much harvested corn as possible in hopes its price moves 15 percent higher to $5 per bushel in a few months.
Soybean prices have been bouncing in a tight range from $13.40 to $14 per bushel lately, and Hurt thinks those price levels can be maintained for a while until what is likely to be a huge South American soybean crop gets harvested early next year.
Meanwhile, cash prices for corn have been hovering around $4.35 to $4.40 per bushel, but Hurt thinks there’s a chance the price will edge higher if future planting projections suggest farmers intend to plant less corn next year.
This year, projections call for a record-setting 13.8 billion bushels of corn to be harvested across the United States. The latest U.S. Department of Agriculture estimates for Indiana project the state’s farmers on average will see yields of 166 bushels per acre statewide and 169 bushels per acre in Bartholomew County.
The Bartholomew County number is 70 percent higher than last year, when drought hit farmers hard throughout the Midwest. This year, dry weather ruled for much of August. But it wasn’t enough to seriously hurt the expected corn harvest, although there was a slight impact, Hurt said this week at a breakfast meeting arranged by the Purdue Cooperative Extension-Bartholomew County.
The USDA reported this week that 64 percent of Indiana’s corn crop looks good to excellent at this point, up from just 11 percent of the crop that scored that well a year ago. Fifty-six percent of the state’s soybeans are “good to excellent” as well, double the rate of last year, the farm agency said.
Earlier in September, a few grain elevators offered premiums to farmers if they would go ahead and harvest corn to fill their bins, and farmer Evan Clouse of northern Bartholomew County said some growers took advantage of that deal.
“The elevators were about out of old corn, and they offered a premium to harvest a little early, if farmers could get some of their corn in,” said Clouse, who grows corn and soybeans. Clouse said his crop wasn’t far enough along to take advantage of the deal at the time, and the premiums “are just about gone now.”
Corn harvest nears
Clouse said he’ll probably start harvesting his corn crop next, and he plans to follow Hurt’s price-conscious advice on both corn and soybeans.
“Soybeans we’ll price now or before the end of the year. But we may store what corn we can in the bin and hope for a price bump,” he said. Clouse expects a good corn yield but said the dry weather last month did trim “some potential off the top end of the crop.”
Hurt said the record corn crop in the U.S. has been driven in large part by the use of corn to produce ethanol for automotive fuel mixtures. But he said supply and demand is evening out and he expects corn plantings to dip next year.
“Corn supply has caught up with demand,” the Purdue economist said.
If corn prices manage to climb closer to $5 per bushel later this year, it will be a big help to farmers, Hurt said, adding that less-efficient growers with high costs of production “are feeling some financial stress” at current price levels. A year ago, farmers felt stress from the severe drought that damaged yields even as prices peaked at $8.50 per bushel last September.
For soybeans, the U.S. expects to harvest just 3.15 billion bushels this year. That relatively small soybean crop will keep prices robust for the time being, Hurt said. The total is about 4.5 percent higher than last year’s drought-stricken soybean haul but not enough to solve an ongoing soybean shortage, Hurt said.
That’s likely to change in 2014, though, in large part because U.S. farmers are likely to plant more soybeans and a little less corn to accommodate demand and market conditions, Hurt said.
Indiana crop conditions
Very poor 2% 3%
Poor 8% 10%
Fair 26% 31%
Good 47% 42%
Excellent 17% 14%
Source: USDA, National Agricultural Statistics Service
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