With wary eyes on corn market
Mar 13, 2007 10:10 AM,
By Forrest Laws
Farm Press Editorial Staff
And so the Mid-South’s grand experiment begins. As this is being written, farmers are loading planters to put in what might be the largest corn crop the region has seen since growers stopped feeding mules.
Unless rain intervenes, much of the acreage could be planted within the next two weeks. Because they can easily cover 200 acres a day with 12-row equipment, farmers could have this crop in the ground by mid- to late March.
We say easily although farmers who have been planting corn for years have been cautioning their new-to-corn neighbors to slow their tractors down to 5 mph to avoid double-planting and other problems. That’s one lesson producers may learn in coming weeks.
The last time the Mid-South got this excited about the crop, farmers started out intending to plant a “little corn” to take advantage of slightly higher prices. But the weather held, corn futures kept rising and growers kept ordering more corn seed.
If memory serves, the 1996 growing season turned hot and dry and aflatoxin began to show up. Some producers wound up burying their corn because they couldn’t find an elevator that would take it.
Hopefully, weather conditions will be more favorable this year, although the long-range forecasts show hot, dry weather. If that proves to be the case, irrigation will be more than a luxury.
Corn futures appear to be holding for now. Analysts were predicting a decline in March when traders began to get a better handle on planting in the South and planting intentions in the Midwest.
Instead, prices have been rising with September corn futures closing at $4.35 per bushel in recent sessions. That’s where futures were trading when the Mid-South made its last big run on corn in 1996.
Those gains appear to have added more fuel to the corn furor that shows little sign of cooling down. Every attendee at the Mid-South Farm and Gin Show in Memphis knew of a longtime cotton farming operation that didn’t intend to plant a single stalk this year.
But worrying signs are emerging. Some country elevators have increased their basis to 50 to 60 cents per bushel off Chicago futures because they may have booked more corn than was prudent.
“Most of our corn goes to poultry operations,” said a veteran Mississippi corn grower, “and those guys aren’t feeding as many chickens because of higher feed prices. We don’t have the ethanol plants they have in the Midwest to help drive local prices up. My elevator guy has said he would try to work with me, but the basis has me concerned.”
The National Corn Growers Association has been trying to assure the renewable fuels industry, livestock organizations and members of Congress that corn supplies will be adequate in 2007. They should also be making sure corn producers understand the marketing risks and how to protect themselves in case prices do go south.
e-mail: flaws@farmpress.com
