Albia Location Update From Gary

The grain markets have had some action since my last blog. John Macintosh, a well known grain trader in Chicago thinks the corn yield should be lowered by 5 bushel per acre which would send the market up. Then the USDA’s final 2011 corn yield came out raising the yield by ½ bushel per acre from the last report throwing the markets in a tail spin. Their average trade guess was 147.2 bushels per acre, which ranks as the worst national corn yield in the last eight years. A simple trend shows a yield expectation of 160 bushels per acre for 2012. This seems high since we have only hit that yield twice before and analysts are already discussing possible weather issues throughout the Midwest for the upcoming growing season.

On January 3^rd, the opening December corn price on the Chicago Board of Trade was $5.86. Since 2007, the annual highs in the December corn contracts have averaged $1.55 above the open on the first trading day of the year. The trading range was a low of $0.25 in 2009 to a high of $3.16 in 2008, above the January open. The annual lows have averaged $.96 below the January open. This means the low could be $4.91 or an average high of $7.42. That is a range of $2.50 which is quite a spread.

We are asked all the time, when should I sell or do you think the market will more higher? We can pass on the information our brokers give us to help you. However, the most important information you need as a producer is your cost of production. You may be passing up very profitable prices and not even know it as emotions get involved when the markets move both ways. My advice is to take advantage a cold winter day to sit down and figure your cost of production or breakeven price. Once you have this information we can help you develop a marketing plan. Feel free to give Mark White a call at the number below and he can help you strategize.  Mark White: 641-828-8500