“There’s still a lot of positive things happening in the agribusiness,” he said. “Sometimes we just have to look away for a few minutes.”
As prices for those futures contracts fall, Lillibridge said farmers have built up a lot of storage space over the past decade, and many of them are likely to hold on to the corn crop and watch its base in the fall. Lillibridge said he has enough storage at his own facility to clear away every bushel when needed.
“If processors want to get that corn into the supply chain, it’s going to come from the grassroots,” he said. “So if we look at the futures market and say, ‘Oh my gosh, it’s under $5, the sky is falling,’ depending on where you are, the base is still pretty good, and it could be be our saving grace.
CORN
It’s mid-May and much of the US corn crop has yet to be sown, but markets are reacting to last week’s USDA forecast of a record corn crop of 15.26 billion bushels for 2023-2024, along with expected ending stocks of 2.2 billion bushels.
“It’s a combination of expecting a second year of record production in Brazil followed by expected record production in the US,” said DTN chief analyst Todd Hultman. “Between those two things lies a great deal.”
China is also anticipating a big safrinha corn crop from Brazil, whose July contract is already priced at $4.68 a bushel. “They (Chinese buyers) are already eyeing cheaper corn,” Hultman said.
After two straight years in which the average farm price has been above $6 a bushel, the USDA’s May World Agricultural Supply and Demand Estimates (WASDE) report forecast $4.80 a bushel.
The crop insurance guarantee, with an 80% protection level, was lowered to $4.73 a bushel in February.
SOYBEANS
November soybeans fell 19.5 cents to $11.87 1/2 on Wednesday as Brazil delivers a 5.7 billion bushel crop and the USDA also delivers a record 4.5 billion bushel crop from U.S. farmers has predicted.
The USDA expects an average farm price of $12.10 per bushel for the 2023-24 marketing year, down $2.20 from the previous crop.
Looking at crop insurance, the 80 percent protection level for soybean insurance was $11 a bushel.
See also “Fertilizer prices move in two directions” here:
https://www.dtnpf.com/….
Chris Clayton can be reached at [email protected]
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