Listen Here: Agribusiness Matters 8-17-16
by Ken Root & Whitney Flach
Last Friday?s 15 billion bushel estimate for this year?s corn crop has many wondering when the low price will be put in and whether farmers should store or sell the crop. The August Crop Production Report was larger than most had anticipated, but demand for cheap grain caused an uptrend following a few moments of uncertainty.
Looking at corn, University of Illinois agricultural economist Darrel Good says the market handled the 15 billion bushel plus corn crop very well.
?We saw an initial drop in prices, but some recovery as the day went on. The market it thinking that perhaps with the late season weather that the yield may fall just a bit short of the USDA’s projection, which would give us a little tighter balance sheet, says Good.?
There is more yet to be discovered about the size of the corn crop in the United States as we move into harvest and USDA updates the Crop Production reports in the months of September and October. For now, it appears the market may be headed for an early harvest season price low rather than a late one says the agricultural economist.
Good says, ?I think an early low in the market, perhaps around the September Crop Production Report.?
The question now on the minds of many farmers is just exactly what do they do with a big crop that is not worth a lot of money. The market, Darrel Good says, is telling them in a small way to go ahead and store, ?I think storage is the way to go.?
