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The Daily Grain
An opinion blog |
To Sell or Not to Sell 08/05/19 9:25:59 AM
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When are the prices going to go up? When are we going to see $6 corn again? That seems to be the question going though most growers' minds these days. With the wet spring creating unplanted acres, delayed planting, and flooding issues across the country, everyone seems to be waiting for the turning point for when the market will finally reflect the short crop. But will this actually happen?
While I can’t tell you what the market will do, I can give you some insight into what I have seen/heard in my recent travels. This past month, I have driven through Indiana, Illinois, Ohio, and a small portion of Missouri. Without a doubt, I can tell you Northwest Ohio is the worst I have seen. For every planted field, there’s a field left unplanted. I would even argue that I saw more unplanted fields than planted. Indiana looked a little better. There were portions that the corn was tasseled and beautiful, and then a couple miles down the road you could see corn that was short and had no tassel. Same with southern Illinois. In a normal year, the corn in these parts of the country are tasseled by the fourth of July.
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I was also able to stop in Havana, IL and talk with my old boss at one of the river terminals there. Havana is located on the Illinois river and in an average year sees around 85 million bu of grain. My former boss farms in his spare time when he is not managing the elevator. To me, the crops in his area looked gorgeous, but according to him, while they aren’t in bad shape, their yields will not be breaking any records. He was able to get most everything planted, but it wasn’t until around June 13th. As an Illinois farmer, this is extremely late. While the crops there are doing good, it is starting to get a little dry. The producers that have irrigation are running it, and the guys that don’t are starting to pray for some rain. According to him, they will be cutting corn in December, and while that’s not quite unusual for us, it’s very rare for Illinois.
On the elevator side of things, his location was shut down for 2 months (May 3 to July 7) due to high waters. Because of this, they were unable to finish picking up their two one million bu corn piles and farmers still have a lot of old crop left in their bins. The corn quality is a concern while picking up this pile because it has never been left on the ground this long.
At a conference I attended in St. Louis, they were people form the Illinois, Indiana, Missouri, and Kansas area. We discussed crops conditions and challenges that everyone will be facing this fall. In our discussion, we came up with a 70% average crop condition for corn, and around the same for beans in the areas I mentioned above. Again, some people were happy with how their crops were looking in their area, and others not so much. One thing was agreed upon though, crops conditions overall are much lower than it has been in some time.
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So, does this mean corn will reach $6? I don’t know. No one knows. Time is the only thing that will tell. What I can say is this. Don’t place all your eggs in one basket. Don’t wait to sell all your bushels at harvest and bank on $6 corn. Get some target orders in or make a forward contact and lock down some decent prices for some of your bushels. Even if it's just a couple hundred. You don’t want to get caught with your underwear down any more than you want to get caught with $3.50 corn when you could have gotten $4.50.
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