More in Ed Usset

“What happened? Corn futures went up 25¢ so I sold a contract. But the basis dropped 20. That stinks. Am I getting the shaft?”...More

A larger percentage of the U.S. corn grain acreage was harvested in August this year than is typically the case. The availability of large, new-crop corn supplies during the last month of the previous marketing year makes it more difficult to anticipate the magnitude of old- crop stocks on Sept. 1, according to University of Illinois Agricultural Economist Darrel Good....More

This year has all the signs of producing a corn crop that could fall short of trend-line yields by 20% or more. I call this a butt-kicking drought. Our last butt-kicking drought occurred in 1988. Yields were about 25% below trend. The drought of 1983 was nearly as severe. Beyond these years, we have to go back to the Dust Bowl. In 1934 and 1936, corn yields fell 30% short of trend....More

The 2012 drought has been a game-changer in almost every aspect of farm and ranch management, including production, financial and marketing, says Darrell Mark, adjunct professor of economics at South Dakota State University, during his Aug. 6 weekly Cattle & Corn Comments on the iGrow Radio Network. "With the widespread and severe nature of the drought, yield losses, while expected to be large, remain uncertain, thereby creating significant market volatility," Mark says....More

Actually, I’m not going to answer that. No one knows for sure. But I will give you reason to at least be concerned that the ag economy is making a bubble and that these grain prices are not going to last. As the drought hit, the fundamentals of the corn and soybean market changed dramatically, and this was one surge in prices that we did not need for the long-term benefit of grain producers’ profits....More

The wide soybean price swings reflect ever-changing supply-and-demand expectations, according to Darrel Good, a University of Illinois agricultural economist. "November 2012 soybean futures reached a high of $14 in September 2011, declined to about $11.20 in December 2011, rebounded to almost $14 in early April and again in early May 2012, and traded to a low of $12.45 in the current trading session," Good says....More

The USDA’s projections of U.S. and world corn and feed grain supply-and-demand conditions presented in the May World Agricultural Supply and Demand Estimates (WASDE) report set the benchmark by which the corn market will judge unfolding events. According to Darrel Good, a University of Illinois agricultural economist, those events are continually unfolding, with some of the more important ones to be revealed this summer....More

Last month I explored the hedging practices of merchandisers, exporters and processors, and how it is more than avoiding risk. These are basis traders who employ the purest form of hedging - placing long and short hedges regardless of price expectations or market opinion....More

As planting season gets underway, every year getting the crop in the ground and good growing weather is important. This year may be more important on both fronts than normal, however....More