September 2005
Commodity Corner

Commodity Corner

by Glenn B. Smith

As of this writing, August 18, 2005, corn harvest is just getting started across Alabama, though by the time of printing we should be at least halfway complete. Though acres are down statewide, we expect good yields and quality. Our early reports so far indicate just that, but let us all pray for good weather to help our corn, cotton, soybean and other crops for this season as well as the future.

For the benefit of the state’s producers, we wish that current futures prices were higher on the Chicago Board of Trade (CBOT), but though weather was dry early in the season in the corn belt, a large carry-over of grain stocks due to lack of export demand and an anticipated corn crop of over ten billion bushels nationally have pressured lower cash prices.

I believe a future column should explain what we call "basis," the explanation of why delivered cash prices do not always equal the CBOT quoted price on a particular month’s option.

A summary of the early harvest on the corn crop looks good, though as mentioned before at press time we will have a clearer picture.

South Alabama: Though acres are down approximately 50%, reports are of 115 bushels per acre dry land, 190 irrigated, with 20% moisture.

Central Alabama: Not yet started, though expected dry land grain of 95 bushels per acre corn and 40 bushels per acre soybeans. The limited quantities delivered thus far have also run about 20% moisture.

North Alabama: Surprisingly, north Alabama has had some corn already delivered and reports of early soybeans ready for harvest, probably due to somewhat less moisture during the spring when the rest of the state had excess moisture and a difficult time with their planting. Unfortunately this year there is no premium for early beans. Dry land August corn has thus far shown excellent yields, from 125-150 bushels per acre with a relatively low moisture level of 16-19%.

Unfortunately, no commodity report in the southeast can exclude the potential soybean rust crisis. Though most of the reports of rust infected leaves have been on kudzu plants, not soybeans, this disease spreads quickly and is a great threat to the soybean crop. To date, there have been 18 counties with confirmed rust in Florida, 4 in Alabama and 3 in Georgia. Please consult your Cooperative Farming News or local Co-op store for further updates on this developing situation.