Weekly Outlook - Will Corn and Soybean Prices Return to Pre-drought Levels?

March 2013 corn futures dropped below $5.50 in early May 2012 and were drifting lower when U.S. drought conditions turned prices higher starting in mid-June. The price of that contract peaked in early August, just short of the $8.50 mark. March 2013 soybean futures dropped below $11.50 in December 2011before South American drought conditions and then U.S. drought conditions sent that contract above $17.25 by mid-September 2012.

Corn prices have declined by more than $1.00 since the late summer peak, while soybean prices have declined by more than $3.00. The general expectation has been that prices of both commodities would return to pre-drought levels as early as 2013 as consumption adjusted to the lower supplies and as production rebounded in both South America and the U.S. The futures market currently reflects expectations that corn prices will moderate substantially from current levels by the fall of 2013 as larger crops are harvested in Argentina and then in the U.S. December 2013 futures, for example, are priced $.95 below December 2012 futures. The soybean market expects prices to moderate from current levels by the summer of 2013 as a large South American crop is harvested. August 2013 futures prices are nearly $.60 lower than March 2013 prices. Further price reductions are expected into the fall of 2013 as a larger U.S. crop is harvested. November 2013 futures are about $0.85 below the price of August 2013 futures. Still, the prices of both commodities for delivery in the 2013-14 marketing year are well above the levels prior to the drought of 2012. <Read More>

Horticulture Congress to Educate, Connect Growers

Farmers, growers and owners of agritourism businesses can gain new information in their fields and connect with other professionals at the Indiana Horticulture Congress and Trade Show in Indianapolis.

The congress, which typically draws more than 800 visitors yearly, will be held Jan. 22-24 at the Wyndham Indianapolis West, 2544 Executive Drive. The conference will feature speakers from around the state on a variety of topics in areas such as agritourism, fresh fruits and vegetables, wine grapes, organics, farmers markets and raw products. There will be luncheons, receptions, banquets, roundtables and lectures.

"Our educational sessions are designed to meet the needs of growers, with information on production practices, pest and disease control, processing, marketing, agritourism, food safety and legislative and regulatory concerns," said Peter Hirst, associate professor of horticulture at Purdue University. "The congress is also a wonderful opportunity to reacquaint with old friends and business contacts, as well as form new connections."

Coinciding with the congress is the trade show with more than 70 exhibitors from equipment, seed, processed food and irrigation companies. During the conference, attendees can participate in a cider contest by submitting two 1-gallon jugs of cider to the registration desk by noon that Wednesday, and can also bid in a silent auction to benefit the tree fruit and vegetable extension and research funds.

Certified private pesticide applicators may attend a recertification session on Wednesday or Thursday. There is a $10 fee to attend the session, and participants must know their private applicator license numbers. Additionally, licensed commercial applicators in category 1 may attend sessions for their continuing certification hours.

Early registration is due by Jan. 14 and must be accompanied by full payment in order to be processed. Fees do not include meals and will vary based on participants' membership in certain horticultural associations. Participants should visit www.inhortcongress.org to register. There will be a late fee of $20 added to the registration price for submissions after Jan. 14. Students and educators are eligible to receive free registration.

For more information, contact Tammy Goodale at 765-494-1296 or tgoodale@purdue.edu.

2012 Purdue Custom Farming Rate Survey Now Available

As you may recall, a year ago I posted information on the new process of developing the Purdue custom farming rate publication, EC-130 - Indiana Farm Custom Rates.  A new custom rate survey had been developed and was being distributed to farmers throughout the state via Extension-sponsored events.  The intent was to improve the quantity and quality of the data and improve the publication, with the hope of updating it each year.  Well, the effort was successful - 272 responses were received from 36 Indiana counties - and the new custom rate survey was released in early-2012. 

The data collection has begun for the 2013 publication and the new survey is available.  If you do custom work or hire custom work done on your farm and would be willing share the rates you charge and/or pay, please consider filling out the survey.  All data collected is voluntary and anonymous.  See the link below for the survey:

2012 Purdue Custom Farming Rate Survey 


            

Continued Support for Corn Prices

Corn prices peaked in August, moved sharply lower in September, and have been in a sideways pattern over the past two months. Within that sideways pattern, prices have moved higher over the past two weeks, with March 2013 futures trading within $0.10 of the post-September high. The recent rally has been fueled by some supply concerns and more optimism about near-term demand.

There are two concerns about potential supply of corn in 2013. First, the on-going wet weather in Argentina may reduce the magnitude of planted area of corn relative to intentions. Fewer acres would threaten the projected rebound in production. The USDA has forecast the 2013 harvest at a record 1.1 billion bushels, a third larger than the drought-reduced harvest of earlier this year. The USDA will update the forecast in the monthly World Agricultural Production report to be released on December 11, but a large change in that forecast is not expected this early in the season. During last year’s drought, the forecast of production was not reduced in December, but was reduced sharply in January and again in February. The potential implications of wet weather on acreage and yield are even more difficult to discern than the implications of drought conditions.  <Read More>