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Purdue September Outlook says Don’t Store Corn and Beans

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Thursday morning Indiana farmers heard an updated Purdue ag forecast based on the brand new numbers from the USDA and WASDE September reports. In a live webinar agricultural economist Corinne Alexander covered many areas, but she continues to report that for farmers harvesting corn right now, the best move might be straight to the elevator instead of on-farm storage.

“The plants are saying we’re going to pay you the same price or roughly the same price whether you deliver it today or nine months from now. The market is not paying you more to store. In a normal market in a typical year you would expect to see the market pay you a higher bid, maybe as much as 25 cents higher between now and next May. This year they’re saying it’s going to be worth the same to us next May as it is today. So what that means is if you choose to store on your farm you are then speculating that there’s going to be some surprise coming to the market that is going to drive the price higher.”

Alexander says soybean growers in Brazil and Argentina will plant as many bean acres as they can because of record high prices in the U.S. In anticipation of that crop next year, the soybean market here won’t stay at these levels.

“Right now if you can get that crop harvested if it’s mature and ready to go and you can take it in, there is probably the opportunity for some early season harvest premiums. And the market is giving a very clear signal to not store soybeans. If you store soybeans you are holding an asset that is expected to decline in value dramatically by next March. So if you take a look at what happens to the price by April the market is telling you right now they’re going to pay you as much as $1.25 to $1.50 less by next April than they will today.”

She says there isn’t much of a loss for on farm storage through about Thanksgiving and December this year. Prices then begin to slide and reach 14 and 15 dollar levels by late summer.

Alexander had good news and bad news for pork producers. The bad news is extreme and severe losses for the industry in late 2012 and early 2013. Losses are projected as much as 51 to 53 dollars per head. The upside is a relatively short period of losses.

“And with the current liquidation of the breeding herd that’s occurring in the hog industry, there is the expectation that we will return to break even prices by even as early as 2nd quarter next year, and return to profitability by 3rd quarter of 2013,” she said.

Alexander’s webinar is archived so you can view the entire presentation. Click here.[audio:https://www.hoosieragtoday.com//wp-content/uploads//2012/09/Corinne-Alexander-September-outlook.mp3|titles=Corinne Alexander September outlook]