Iowa Farm Outlook & News

  • Sept. 2016 Prices for 2015/16 Crops:
       Corn $3.60 per bushel, steady with last month
       Soybean $8.95 per bushel, steady with last month
  • Sept. 2016 Prices for 2016/17 Crops:
       Corn $3.20 per bushel, up 5 cents from last month
       Soybean $9.05 per bushel, down 5 cents from last month
  • Sept. 2016 Yield Estimates for 2016/17 Crops:
       Corn 174.4 bushels per acre, down 0.7 bushels from last month
       Soybean 50.6 bushels per acre, up 1.7 bushels from last month
Calf Marketing (9/1/16)

Now is the time to create a marketing strategy for your 2016 calf crop. Cow-calf producers who have an idea about the expected value of their calves can evaluate price offerings and decide among marketing at weaning or retaining ownership. Another issue is deciding whether to just watch and take a cash price at some point or get some price protection in place. With October 2016 feeder cattle futures trading around $138 per cwt, producers can use basis to find an implied calf price or value. In October 2015, the basis on 500 to 600 pound steers in Iowa was $31 per cwt. However, this year the basis has been averaging 52% weaker than in 2015. If this basis pattern holds for October, calves for October marketing would be valued at $153 per cwt. If forward bids are at or better than levels implied by the futures market, then consider forward contracting. If the forward bids are at or lower than levels implied by the futures market, consider hedging with futures or options. If you expect the price to rise and can manage the risk, then waiting may be the best choice for now. If prices rise or hold steady then price risk management will likely cost more than what it is worth. However, if prices decline then there could be several dollars never captured due to the price decline.

Stocks Inline with Expectations (9/30/16)

Stock levels for corn and soybeans were up in the most recent USDA report, but the trade expected that as we move into the next marketing year. Corn ending stocks were estimated at 1.74 billion bushels, up just 6 million bushels from last year. While total corn stocks are about the same, farmers are holding more back on the farm than they did last year. Strong demand from the ethanol and export sectors boosted June-August corn disappearance by 9 percent. For soybeans, we entered the 2016/17 marketing year with 197 million bushels in storage. That's 3 percent above last year's level. And reversing the pattern for corn, less soybeans are being held by farmers on the farm. Summer crush and export demand were firm as well, with June-August soybean disappearance increasing by 55 percent. So the stocks report confirmed strong demand for corn and soybeans, but stocks still grew year-over-year.