The ripening corn and soybean fields stretch for miles in every direction from Dennis Wentworth’s farm in Downs, Illinois. As he marveled at his best-yielding crops ever, he wondered aloud where the heck he’ll put it all.HT: Bloomberg contributor The Big Picture
“Logistics are going to be a huge problem for everyone,” the 62-year-old grower said, adding that he has invested in boosting output rather than grain bins. When harvesting starts in a few weeks, Wentworth expects his 150-year-old family farm to produce 10 percent more than last year’s record. “There are going to be some big piles of grain on the ground this fall.”
From Ohio to Nebraska, thousands of field inspections this week during the Pro Farmer Midwest Crop Tour show corn output in the U.S., the world’s top producer, will be 0.4 percent above the government’s estimate. Months of timely rains and mild weather created ideal growing conditions, leaving ears with more kernels than normal on 10-foot (3-meter) corn stalks and more seed pods on dark, green soy plants.
Prospects of bumper harvests sent Chicago futures tumbling into bear markets last month, two years after a drought eroded output and sparked the highest prices ever. Cheaper grain is bolstering profit for buyers including Tyson Foods Inc. and Archer-Daniels-Midland Co. (ADM), encouraging some cattle producers in the Great Plains to expand herds, and eroding income for farmers who say increased output will make up for some of the slump.
Corn on the Chicago Board of Trade has tumbled 20 percent since the end of May, closing at $3.715 a bushel today, and soybeans are down 30 percent to $10.42 a bushel. The Bloomberg Commodity Index slid 6.3 percent over the same period, while the MSCI All-Country World Index of equities rose 1.7 percent. The Bloomberg Treasury Index gained about 0.6 percent.
Samples in Illinois, Ohio, Indiana and Iowa -- representing 45 percent of forecast U.S. corn output and 41 percent of soybeans -- showed bigger yields than last year, according to inspections on the 22nd annual Pro Farmer crop tour, which ended yesterday. Corn production will be 14.093 billion bushels, compared with 14.032 billion estimated by U.S. Department of Agriculture, Pro Farmer said in its final report today. Soybean output was forecast at 3.812 billion bushels, compared with a USDA estimate of 3.816 billion.
The volunteer scouts on the four-day crop tour drove more than 15,000 miles across seven Midwest states, the biggest growing region, taking random samples by counting the number of kernels on corn ears and pods on soybean plants. Editors of the Pro Farmer newsletter will issue final estimates of U.S. output today, partly based on this week’s measurements.
In Illinois, the No. 2 corn-growing state, Pro Farmer estimated yields at 198 bushels an acre, more than the 188 bushels the USDA predicted earlier this month, while soybeans were estimated at 54 bushels an acre, the same as the government forecast. In Iowa, the top grower, Pro Farmer pegged corn yields at 183 bushels, less than the USDA’s estimate of 185, and said soybean yields will be 49.5 bushels an acre and may reach the USDA’s forecast of 50 bushels....MORE
And a story we were thinking of posting a couple weeks ago but didn't due to uncertainty about the stock:
Grains: What to Buy When There's Too Much Corn? Storage (AFN.tse)
The stock is at $47.88.
Ag Growth bucks weakness in ag equipment sector
Ag Growth International bucked the weakness in the farm machinery sector, unveiling a jump in earnings and foreseeing profits remaining strong, thanks to the prospect of large harvests.
The Canada-based maker of grain handling and storage equipment reported a more than doubling in earnings, to Can$13.64m, for the April-to-June quarter, on revenues up 19.7% at Can$112.4m."Favourable crop conditions in North America and continued investment in agricultural infrastructure lead to robust demand for on-farm and commercial grain handling, storage and aeration equipment," Ag Growth International said.With demand in many overseas markets boosted by desire to fill "a significant storage and handling infrastructure deficit", revenues hit record levels "in all geographies" for the first half over 2014 overall.'Excellent market environment'Orders remain strong too, ahead of what are expected to be record corn and soybean harvests in the US, and with bumper crops in many other countries too....MORE
The stock hasn't done much, $46.90 last.See also, from a few years ago, turn that corn into silage!:
Farmers Betting on Corn Storage (and how not to sell a silo)