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AFBF: Conditions Point to Big Corn Crop, Lower Prices
Ideal growing conditions across much of the Corn Belt so far this summer point to the second-largest corn crop ever, which is bringing a bearish tone to the market, according to Terry Francl, senior economist with the American Farm Bureau Federation.
The Agriculture Department released its July crop report and World Supply and Demand Estimates (WASDE) Friday. U.S. corn production was estimated at 12.29 billion bushels, the second-largest on record due to the second-largest plantings since 1946.
USDA forecasts the yield per harvested acre at 153.4 bushels per acre. If the favorable growing conditions continue, Francl believes the yield per harvested could meet or exceed the 160 bushels per acre set in 2004.
“Over much of the Corn Belt, we’re seeing cooler and wetter weather than normal. Corn is a grass, and it tends to grow rapidly in these conditions,” Francl said.
Friday's USDA report shows big gains to corn crop, supply and carryover estimates, which is giving a bearish tone to prices, Francl said. Corn prices are down 50 percent from the records set at this time last year.
“Corn farmers can expect more price volatility this year. A bearish mentality is still overriding the market. Prices could fall to $3.00 per bushel by harvest, and if we have a really good harvest, perhaps drop to the mid-to-upper $2.00 range,” Francl said.
“For soybeans, there was no significant change in the current year balance sheet, although the larger 2009 planted acreage implies that 2009/2010 ending stocks will go to 250 million bushels, more than double projected 2008/2009 ending stocks,” Francl said. “Soybean stocks will remain tight the remainder of this crop year, however.”