Market Matters Blog
Katie Micik DTN Markets Editor

Friday 08/02/13

Farmers Wary of Overestimating Production

The soybeans in Jefferson, Iowa, are less than a foot tall, a producer told me this week. He's very concerned about an early frost and the lack of growing degree days. Compared to last summer, the temperatures in the Nebraska and Iowa are downright chilly.

The market action in recent weeks has been like taking a Polar Plunge.

After this spring's cold and wet planting, it's understandable that some producers are completely frustrated, especially since the markets aren't behaving according to what they see in their fields. DTN's managing editor Cheri Zagurski keeps up with a few of farmers through an email group, and she recently asked them about how their crops are looking and what they've forward contracted. There are only a few responses, but two clear themes emerged: farmers are wary of overestimations of production (whether it's their own or USDA's) and that's led to cautious marketing and some missed opportunities. Here's what they said:

Avoca, Iowa: $4 and $5 seem way to low compared to where prices have been. I still don't think we have as big a crop coming as USDA seems to believe, and I think the prices fell too far, way too fast. Time will tell, and nobody can second guess USDA and their skewed thinking.

Stanberry, Mo.: Cheri, our crops are looking good but like you said we had less than 2 inches of rain in July. An inch of that came in three showers Thursday-Monday. The beans we sprayed three weeks ago have yet to outgrow the weeds we killed. No I didn't (contract), it's so hard to get in the mood to do that when the corn was rolling every day and you're wondering if you would end up like last year at <60 bushels.

New Era, Michigan: Hi Cheri, my corn crop looks excellent so far. But the recent rains we have received has made it look better. Wheat is off, quality was excellent but yield left something to be desired (lower than anticipated). Apples are coming along pretty good also. I am really left pretty much unprotected on the drop in grain prices; I do have some corn contracted at $5. Should have done more, but at the time it was uncertain if I could fill this contract. My hope is for a weather scare to gain some traction and contract some more before harvest.

Southwest Michigan: We have received some nice precip this month but the days are cool and slow growth worries me. Our hybrid seed corn went in late due to wet cold weather (as did many seed corn acres) and we have dropped to less than 20 growing degree days with the 15 day forecast the same. Soybeans are short but seem to have close nodes with flowers so August will be the determining factor for them as far as yield goes. A local seed corn rep told me this weekend that he has had several complaints on spotty pollination on commercial corn planted early with early varieties. We did have 6 consecutive days with highs over 90 degrees and night time temps in the mid-seventies.

For the 2013 corn crop I am 60% priced and for the 2013 soybean crop I am 70% priced, both with conservative yields. The crop could be better than my projected bushels if rains are good and temps moderate. I also have soybeans priced for 2014 and 2015 with some corn sold for 2014 production.

What about you? How are the crops looking at your place? Have you had too much rain, or too little? Have you forward contracted any, or did production concerns keep you from pulling the trigger?

Posted at 11:33AM CDT 08/02/13 by Katie Micik
Comments (8)
way too much rain. 10% acres drowned out ... 30% of my corn wad planted on june 3rd. soybeans are extra weedy cause had no time to put a preemerge hericide on them. just smoked them with cobra 2 days ago.... is it 2014 yet?
Posted by Paul Beiser at 1:08PM CDT 08/02/13
Where do you farm, Paul?
Posted by KATIE MICIK at 3:23PM CDT 08/02/13
south central mn ... lots of black fields in the area.
Posted by Paul Beiser at 6:05PM CDT 08/02/13
the board of trade is as broken as usda repororts when the cash is over a dollar as the board it really don't mean jack why hedge feed needs it gets you coming and going
Posted by Unknown at 10:43PM CDT 08/02/13
The U.S.D.A. better get out & do some serious walking of the fields out there. That is if they have the ambition to do it. The corn & beans are burning up in majority of Wis. except for the southern part
Posted by KEITH PEARSON at 10:25AM CDT 08/05/13
Has the USDA driven around much?? I 'm very concerned these numbers are way too high.. Jeff Bentley- Canfield OH
Posted by Wayne Greier at 1:07PM CDT 08/05/13
I farm in KY and the corn looks great while your driving down the road. Unfortunately when you walk out past the first 12 rows, you see the drowned out spots, nitrogen deficient corn, and a population that is thin, all caused by heavy rains throughout the entire season. We should have a decent year but we don't believe it will be a bumper crop.
Posted by wes steele at 2:57PM CDT 08/08/13
I farm in KY and the corn looks great while your driving down the road. Unfortunately when you walk out past the first 12 rows, you see the drowned out spots, nitrogen deficient corn, and a population that is thin, all caused by heavy rains throughout the entire season. We should have a decent year but we don't believe it will be a bumper crop.
Posted by wes steele at 2:57PM CDT 08/08/13
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