Corn Harvest Only 30% Finished
Published: Friday, October 20, 2023
Indiana Farm Bureau's chief economist, Todd Davis, is offering his insights on the latest World Agricultural Supply and Demand Estimates (WASDE) report released last Thursday by the U.S. Department of Agricul-ture.
"Although soybean crop in Indiana is expected to be slightly smaller than last year, projected corn yield could hit a record amount of 197 bushels per acre, which would be 9% more than last year," said Davis. "So, in the U.S., we have plenty of corn and are pretty tight on soybeans. Fortunately for corn growers, corn prices are currently rallying alongside higher soybean prices."
According to Davis, the corn and soybean markets are beginning to come to terms with the yield uncertainty from the early-season drought. The market will ab-sorb the updated production information in November and January and then shift its focus to factors that could im-prove corn and soybean demand and prices.
Davis said farmers should fine-tune their budgets for the 2023 crop once production is known. Understanding the per-bushel price needed will help in identifying any post-harvest pricing opportunities. Any weather event threatening South American soybean or corn production could provide a pricing opportunity for vigilant managers.
Farmers should also work on their 2024 crop projects to understand their borrowing needs. The Federal Reserve may increase interest rates at least once before operating loans are se-cured for the 2024 crop. Farmers should evaluate the benefits of selling grain in storage to pay down debt and reduce borrowing needs for next year. Reducing debt would be particularly valuable for those with reduced working capital who will have to increase their borrowing needs next spring.
Also, keep in mind that increased interest rates will increase the carrying cost of grain into spring. A cost that farmers should know is the interest cost of carry. The car-rying cost should be included in post-harvest marketing plans.
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