Farm Talk

Crops

April 15, 2014

WASDE report eases low crop price fears

Parsons, KS — USDA’s April 9 World Agricultural Supply and Demand Estimates continued a series of recent reports that have offered corn and soybean producers a more optimistic grain-price outlook than what was expected for most of the winter, Purdue Extension agricultural economist Chris Hurt says.

Cash corn prices fell to near $4 a bushel during the fall and early winter months — a price well below the estimated $5 per bushel it cost farmers to produce the crop. Grain producers were afraid of how low prices would fall and how long they would persist. Sustained low prices not only eat away at grower profits, but they also can lead to decreases in farmland values and cash rents.

"That fear was very real," Hurt said. "But recently, both old- and new-crop corn futures have pierced the $5 mark on the heels of USDA reports showing better old-crop corn usage and reduced acreage for 2014 plantings"

Low corn prices drove winter corn use higher than originally anticipated, causing the USDA to increase export estimates by 125 million bushels.

Since November, USDA has increased total corn usage by 500 million bushels, which includes increased exports, livestock feeding and ethanol use.

"When you see usage go up across the board as we have this year, it's an indication that corn prices near $4 were just too low," Hurt said. "Being 'too low' means that almost all end users had very high margins and wanted to own more corn. It also means that prices needed to rise to better reflect strong usage."

Back in March, farmers reported to the USDA that they would reduce national corn acreage by 3.7 million this spring. Reduced acreage coupled with strong usage means that with normal yields in 2014, corn production will be relatively in balance with usage. Hurt said if that happens, prices could range between $4.40 and $4.80 per bushel for the 2014 marketing year.

Overall, Hurt said, this is good news for growers who, over the winter, wondered how far below $4 corn prices could plummet.

"At this point, prospects are more positive that U.S. corn prices can average somewhat above $4.50 per bushel for both the 2013 and 2014 crops," he said. "The closer those national corn prices come to $5, the less downward adjustment is needed in land values and cash rents."

The soybean outlook also has improved. According to Hurt, the U.S. has already sold more soybeans for export than it can deliver. As a result, soybean futures have touched $15 per bushel.

Historically, when soybeans have reached even the $14 mark in similar situations, prices have continued to climb to $16 or more per bushel.

"There are multiple ways to work out the tight old-crop supplies, including encouraging some buyers to cancel contract purchases, importing soybeans from South America or having U.S. soybean prices go so high that they discourage some domestic use," he said.

As a start, USDA analysts increased old-crop soybean imports by 30 million bushels in the April 9 WASDE report. But even with more imports, the U.S. has still committed to deliver to foreign buyers almost 60 million bushels more than what is available in old-crop supplies.

"The oversold dilemma continues and further adjustments likely will be needed this spring and summer," Hurt said. "It isn't clear if those adjustments will require even higher soybean prices or whether contract cancelations will resolve the issue."

Short supplies of old-crop soybeans led farmers to tell the USDA in March that they will shift 5 million acres out of corn and sorghum production into soybeans. If that happens, Hurt said, average soybean prices for the 2014 marketing year would drop back to the $11 to $11.50 per bushel range.

The total cost of production for a bushel of soybeans is closer to $12, so prices at this level could still mean a drop in land values and cash rents, Hurt said.

"However, just like for corn, these soybean prices are more optimistic than just a few months ago," he said.

1
Text Only
Crops
  • Scientists complete chromosome based draft of wheat genome

    Several Kansas State University researchers were essential in helping scientists assemble a draft of a genetic blueprint of bread wheat, also known as common wheat. The food plant is grown on more than 531 million acres around the world and produces nearly 700 million tons of food each year.
    The International Wheat Genome Sequencing Consortium, which also includes faculty at Kansas State University, recently published a chromosome-based draft sequence of wheat's genetic code, which is called a genome. "A chromosome-based draft sequence of the hexaploid bread wheat genome" is one of four papers about the wheat genome that appear in the journal Science.

    July 22, 2014

  • Drought & poor wheat harvest in Kan. has effects on nat’l economy

    The Kansas wheat harvest may be one of the worst on record — and the loss doesn't just hurt Kansas, according to a Kansas State University expert.

    July 15, 2014

  • Watch for corn leaf diseases

    In general, corn in southeast Kansas looks about as healthy as any reasonable producer might hope.

    July 1, 2014

  • Consider wind when applying herbicides

    Jill Scheidt, agronomy specialist with University of Missouri Extension in Barton County, scouted fields west of Lockwood on June 18 for the crop scouting program.

    June 24, 2014

  • WheatTour-007.jpg SW Mo. wheat tour yields nutrient tips

    Laying down nitrogen on the wheat fields is quite possibly one of the most complex and critical operations facing producers.

    June 17, 2014 3 Photos

  • Corn planting nears completion, early condition good

    With corn planting nearly complete and emergence keeping pace with the five-year average, the U.S. Department of Agriculture released its first forecast for the condition of the 2014 U.S. corn crop.

    June 10, 2014

  • Harvesting short wheat

    In many areas of Kansas, prolonged drought has resulted in short wheat and thin stands. Harvesting wheat in these situations can be a challenge.

    June 3, 2014

  • Controlling large weeds in Roundup Ready soybeans

    Controlling large weeds is often considerably more difficult than controlling smal-ler weeds. The following are some suggestions for controlling larger troublesome weeds in soybeans.

    May 28, 2014

  • aflatoxin-corn.jpg Aflatoxin risk looms large for corn growers

    To diversify their farms and tap into high demand for one of agriculture’s most profitable crops, dryland farmers more familiar with growing wheat and milo are eager to try their hand at corn.

    May 21, 2014 1 Photo

  • Kan. wheat crop smallest since 1996

    WICHITA, Kan. (AP) — Kansas is expected to produce its smallest winter wheat crop since 1996, an indication of a deepening drought across the nation's wheat belt, the government said in its first official forecast of the growing season.

    May 13, 2014

Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Seasonal Content