Saturday, October 6, 2012

More corn, lower exports

Estimates of this year's corn harvest continue to increase while government statistics indicate U.S. corn exports have declined by 25 per cent.

Informa issued its latest estimate of the U.S. corn harvest at an average of 127 bushels per acre which is roughly 10 per cent higher than the most recent U.S. Department of Agriculture estimate.

The speculators who jumped into the market during the height of the summer drought might have their bank accounts washed out. 

Those who use the futures market for hedging will, as usual, do just fine with their futures contracts offsetting any gains or losses on cash purchases or sales.

And those who took out crop and price insurance contracts will do just fine, thank you.

What about those poor hog farmers? Those who specialize producing weaners, running a nursery or finishing pigs without growing their own corn and soybeans are in deep doo-doo. 

But hundreds of Ontario hog farmers who run farrow-to-finish operations and grow enough corn and soybeans to feed their pigs will weather this crisis in fine shape. They just won't get top dollar for their corn and soybeans.