Mikkel Pates, Forum Communications, Published June 29 2012
Northern farmers expect strong corn prices
Mike Clemens, Wimbledon, N.D., farmer and board member of the North Dakota Corn Growers Association, said he recently bought back some of the corn hedges he’d made on the Chicago Board of Trade. He said he decided to lighten some of his positions after seeing the way some of the corn was rolling up farther south.
“We had positions sold, and we bought them back. We think there’s an opportunity to resell at a higher level. It takes a major (market price) move to do something like that.
“You think you’re going to have a good crop, but you have to wonder if the high pressure and heat dome will spread north,” Clemens added. “We’ve been on the fortunate side of the jet streams. We’ve got to be meteorologists as farmers, you know.”
But, he said, each farmer will respond differently to volatile markets, he said.
Carrol Duerr, manager of the Colfax (N.D.) Farmers Elevator in northern Richland County, said the prices are higher today than they were in mid-June.
Duerr planned to look at a Friday crop planting and stocks report that provides the U.S. Department of Agriculture’s estimate of major crop acreage to see if the government is predicting a downward drift in yield potential.
Clemens said he thinks the Friday report would be dwarfed by the weather reports.
“The report is ancient history,” he said, because the crop was largely planted by May 1. “I think the crop conditions are more important right now than the number of acres they’ve got planted. The future of the weather patterns are for more hot and dry. I expect more (price) rallies.”
Frayne Olson, a North Dakota State university Extension Service crops economist/marketing specialist, said the reason for a rally is “never as simple as just one thing.”
“Until recently there’s been an expectation built into the markets that we’re going to have this monster corn crop,” Olson said. “We had the early planting season in major growing regions in the U.S. and very favorable weather.”
Dwight Aakre, NDSU Extension Service farm management service, said both the corn and soybeans look good in the region right now. “The big factor is what yield we’re going to have,” he said of whether farmers can capitalize on the rallies.
Aakre said a lot risk remains, but so does potential for positive bottom line returns on corn and soybeans.
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Mikkel Pates writes for Agweek