Outlook stable for corn, dismal for beans If predictions in the first USDA monthly crop production report pan out, producers could be receiving more stable prices for their corn and wheat crop, said Al May, Extension grain marketing specialist at South Dakota State University.
The USDA report issued May 12 predicted United States corn and wheat production to be down about 200 to 300 million bushels from last year. Soybean production is anticipated to increase to 2.8 billion bushels, up from 2.7 billion bushels just a year ago.
"So much hinges on production this year. Hopefully, USDA numbers are down enough there'll be no further erosion of prices," said May.
The predicted decrease in corn and wheat acres may have a stabilizing impact on prices.
"We can look at corn prices staying relatively steady or perhaps improving over the summer months," said May. "Production may be down, but ending stocks will still be higher than a year ago. That's as critical as production."
May recommended corn farmers watch the sky. "If there would be any kind of weather scare this summer, short-term pricing opportunities may result. If the opportunity arises, producers need to take advantage of it," he said.
"Since the world wheat stocks are dropping, I think we have a long-term positive outlook on wheat," said May. The decreased wheat acres are not exclusive to the United States, world stocks are also dropping.
"This may give the large surpluses of wheat we've been struggling with the last couple of years a chance to get down to a more manageable level," he commented. "We can get more of our product exported and hopefully that will support prices."
However, the specialist is not as optimistic about soybean prices. "There's no question if the soybean crop turns out to be as big as this first estimate, price on soybeans will continue to be pressured downward," he said.
Producers are going to have to make some decisions on how to market their soybean crop.
"Right now, the market loan price is higher than the current cash price ? I don't see any positive signals that would allow beans to get higher than that if this big crop does come in," he remarked.
The challenge for South Dakota farmers is, regardless of price, if a crop is not planted, there is nothing to sell. If the weather does not cooperate, producers may be looking for alternative crops for designated corn acres.
"The fear all over the Corn Belt is a shift from corn to soybeans. In South Dakota we will see a shift of acres from corn to soybeans if rain continues to delay planting," predicted May. "In the counties further west and the eastern tier counties, we'll probably see additional sunflowers to replace some of those corn acres."