By Carrie Muehling
NORMAL – Grain prices are holding steady as spring inches closer.
“We’ve seen a little bit of support, especially due to the fact the southern half of the U.S. – particularly the southwest – has been unable to really get a good start. Typically this time of year you see some fairly good activity in Texas and the Deep South as far as fieldwork goes. It’s just not happening just yet due to the storm systems coming across the southern half of the U.S. That’s kind of got the market a little firm in through here on that idea,” said Curt Kimmel, commodity broker with Bates Commodities in Normal.
Soybeans have also been firm in the short term due to transportation issues in the southern hemisphere. There are isolated weather problems in South America, but nothing alarming as a whole. The truck strike has slowed down the transportation of fuel, which has affected harvest activities and pushed back the planting of the double cropped corn. That crop will be planted eventually, but not as early as many farmers would like.
The last few months have provided fairly good demand for corn and soybeans with colder than normal temperatures and big usage in the livestock sector. The market will soon turn its focus to the March 31 Planting Intentions report for direction.
USDA released budget numbers in early February based on economic forecasts from last fall. The USDA Ag Outlook conference also gave some projections, although not based on farmer surveys. Based on corn and soybean seed sales, many are predicting fewer corn acres and more bean acres this year, but that will always depend on spring weather.
“Traditionally here in the U.S. if we have some favorable spring weather, it means a little heavier corn or if we run into a wet situation, we may see a little bit of switching taking place. So that’s still an unknown and that's going to be a market maker here from day to day,” said Kimmel.
In the livestock sector, prices of beef and pork are backing off from highs. Pork production is picking up as the PED virus did not take hold this winter. Some producers are trying to expand and feeding to heavier weights. Kimmel expects some pork chop sales at the meat counter in the days ahead. However, bacon will not be cheaper as demand remains strong.
Domestic consumption of beef continues to slip. Much of the expectation there will hinge on overall export demand. The trade will also monitor imports from Mexico, especially of feeder cattle. As long as feed prices don’t explode to the upside, Kimmel predicts livestock producers will persevere.
Carrie Muehling can be reached at [email protected].
