Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
Crop Conditions Deteriorate Again
The nation’s 2012 corn crop is now rated as 63% good to excellent, a three point drop from the week before and the second consecutive week that conditions have declined. Meanwhile, soybean conditions dropped four points with 56% of the crop now rated as good to excellent, week ending June 17. Eleven of eighteen sates that make up 95% of the nation’s soybean production have double digit ratings for soybeans in the poor to very poor categories. The National Weather Service forecast for the next seven to ten days suggests that conditions could deteriorate further this week. Bottom line – a 166 bushel per acre national corn yield is not likely to be attainable. Old crop domestic soybean supplies might need to be rationed thereby providing support to prices.
Market Strategy
U.S. farmers can count on an early harvest for the 2012 crop. This means that the window of opportunity for advancing pre-harvest sales for both corn and soybeans is likely to close much earlier than normal. Since the first of the month through the beginning of the third week of June new crop Dec ‘12 corn futures prices have rallied by about 60 cents per bushel. New crop Nov ‘12 soybean futures prices have rallied by nearly $1.50 per bushel. Old crop July ‘12 corn futures rallied by about 60 cents per bushel an d old crop July ‘12 soybeans rallied by almost $1.00 per bushel. New crop July ‘12 SRW wheat futures have rallied 50 cents per bushel over the past week due to dry conditions in parts of the world e.g., Russia and the Black Sea region. As of Monday, June 18 about 50% of the U.S. winter wheat crop was reported as harvested.
Considering the magnitude of the recent rally which appears to be largely weather related, it might be wise to consider advancing both new crop and old crop sales for both corn and soybeans. How much? To some degree that depends upon the amount that one has previously booked. The recent rally presents an opportunity to bring new crop sales up to the 50% to 75% level and too complete old crop sales in the event one is holding onto old crop corn or soybeans. If the rally continues then additional opportunities will be presented for forward pricing remaining pre-harvest new crop sales needs and to begin pricing a portion of intended 2013 production. Currently in e-trade, Dec ‘12 corn futures are at $5.63; Nov ‘12 soybean futures at $13.92; and July ‘12 SRW wheat futures are trading at $6.77 per bushel.
The next round of trade data will be released on June 29 when USDA releases the Quarterly Grain Stocks in All Positions and the Planted Acreage reports.
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.