Monday was further evidence that the grain markets are definitely being impacted by weather conditions and forecasts, and with no badly needed rain in the Corn Belt forecast until about Friday, futures prices exploded to the up side.
In his market outlook last week during the Purdue Farm Management Tour, Dr. Chris Hurt, Purdue Extension agriculture economist, said the addition of parts of Iowa and a good part of Missouri to crop areas already struggling, along with the dry forecasts, could mean record high corn and soybean prices this year.
“Corn we have a lot of acreage. The June 29th update on acreage will certainly be important to see where USDA is judging what finally did get planted. But we do have a lot of acreage on corn and that gives us a little bit of a cushion. Now with where we’re at nationally on yields my number is probably very high 150’s right now, maybe around 160. That’s about a 500 million bushel loss of production across the United States. When USDA’s been talking about a 1.8 to 1.9 billion bushel carryout this says we’re going to trim that down to a 1.3, a 1.4, something like that. That actually will not cause a major explosion to the upside.”
But Hurt added, “That’s where we are today. If we go one more week, two weeks, three weeks into this corn crop, we’re going to start trimming that more and more.”
So there is some cushion in the corn market, but no cushion when you look at soybeans, even though that crop has a longer window to recover from hot, dry weather.
“We have to get every bushel and normal yields. If we don’t we’re talking higher bean prices. So $14 beans very quickly become $16 beans. But bean yields we can’t say they’re permanently damaged yet. That’s going to be on in to last half of July and August. So, beans still have a while to go but beans probably have the most explosion to the upside. But corn is going to be the one that’s most critical first.”
Those are just possibilities, but it certainly means producers need to watch the market day by day and minute by minute, according to Hurt. The markets will remain highly volatile and he again urges diversification in marketing strategy.[audio:https://www.hoosieragtoday.com//wp-content/uploads//2012/06/Chris-Hurt-on-corn-and-bean-upside.mp3|titles=Chris Hurt on corn and bean upside]Full HAT interview:[audio:https://www.hoosieragtoday.com//wp-content/uploads//2012/06/Chris-Hurt-mini-market-outlook.mp3|titles=Chris Hurt mini market outlook]