By Doug Tenney, Leist Mercantile
Corn harvest has begun around the country. Some of the nation’s first corn came off in Arkansas and surrounding areas. They are among the most fortunate producers this growing season. They are enjoying the rare combination of great yields and high prices. During pollination, they also missed the 100 plus degrees seen in much of the Midwest during that very critical period. They are seeing some fantastic yields coming in near 170 to 200 bushels per acre. However, with good yields, the basis can be pretty wide as they were seeing numbers of 50 to 70 under the December. With the drought of the Midwest, we have seen some rather strange
events taking place. One of those is the extremely low water level seen on much of the lower Mississippi River this summer. With those lower water levels, drafts on barges headed for New Orleans were affected. Those barges had as much as 20% less corn than normal. In addition, barge tows often had to be reduced from two wide to just one barge as lower water levels narrowed the river’s width. Another abnormal event was the huge basis differences from south to north. The Arkansas levels detailed above were 50 under December while those on the upper Mississippi River were 50 or more over the December. This is a huge difference for only a few hundred miles along the Mississippi River. The third abnormal event had loaded barges of corn moving north to help fuel the ethanol plants of the Midwest. This is extremely rare.
Corn harvest started in Ohio as well with very poor results. Due to the summer’s heat of almost 50 days above 90 degrees along with very limited rainfall, corn yields were hit drastically in many areas of Ohio. Many producers continue to be amazed at the variability of corn yields across the Midwest with yields of 30 to 150 bushels being very common. Some corn harvested in Pickaway County had moisture levels above their yields. Producers were just devastated as some yields were reported to be anywhere from 7 to 30 bushels. Those would be disappointing yields for soybeans let alone corn. The crop year of 2012 cannot be over soon enough.
Look for corn and soybean prices to continue their current mode of extreme volatility. Look for corn to be in a range of $7.80 to $8.50 until harvest is further along. Soybeans seem destined to make new highs as demand still needs to be rationed to match supplies.