Newsletter Archive

2009 Harvest off to a good start

Heart to Heart, October 2009 Connections

by Scott Stabbe

Ready or not here we go. Harvest is here. Already on the 16th of September, we started getting some new crop beans in. This fall, like last, will be a battle to get the corn to dry down as we continually hear about the lack of heat units (300 heat units behind). We will be asking that you have patience with us if we have some varying hours due to drying capacity. We have dropped the drying charges for this fall as indicated in the grain policy in this newsletter. This year, as they were last year, the storage and drying charges vary between the two regions.  The Northwest region has lower storage cost, but higher drying and the Southeast Region has lower drying charge but higher storage rate.

Early yield reports from the southern states have been exceptionally good. If they are any indication of the balance of the country, we will hit the USDA’s crop numbers.  Hopefully, the USDA is also correct on the demand side or we could have a much larger than expected carryover of corn. There is also more talk of Brazil increasing soybean acres this year. So, if we are going to see much higher corn or bean prices we will need to continue to see tight carryouts, which does not look to be the case in corn for a while. Beans will have some potential if everything does not fall in place for Brazil to add more acres, such as financing, fertilizer availability, export demand, etc.

It appears that this upcoming marketing year may be a good year for either selling and buying back bushels on the CBOT on dips down, or just sell and buy some options. That way, you can move the grain and relieve yourself of future quality risk as this year’s corn may not be any easier to keep in condition than last year. I’m sure we all remember how much of a challenge it was. As always, there is no ideal marketing answer. The law of averages is still a solid rule for grain marketing rather than trying to beat or out guess the markets. Now more than ever, with extreme uncertainty and volatility in the economy, diversity in marketing is just as wise as diversity in an investment program.

We hope everyone will have a safe and bountiful harvest and thank you ahead of time for your patience and patronage this harvest season.

Your Grain Team