Crop Prices for Iowa

Corn shot up 30 cents per bushel to $6.37 for March delivery before settling back and closing at $6.31, up 24 cents per bushel. Soybeans ended the session at $14.15, up 58 cents per bushel after jumping 66 cents to $14.23 per bushel in early trading.
The USDA report showed available grain stocks at the end of the 2010 harvest stood at 1.9 billion bushels, down from 2.2 billion bushels at the end of 2009.
Iowa farmers harvested fewer acres of corn with lower yields in 2010, but the state retained its ranking as the nation’s top corn producer. The state’s corn farmers produced 2.2 billion acres, down from 2.4 billion acres in 2009.
The average yield slipped to 165 bushels per acre from a record 182 bushels per acre in 2009. Record rainfalls in July damaged corn in central Iowa and it was too late for crops to be replanted.
Iowa soybean farmers helped the state retain its position as the nation’s top soybean producer. Farmers produced 496.2 million acres of soybeans, up from 486 million acres in 2009.
The average yield was unchanged from 2009 at 51 bushels per acre.
Nationally, corn production dropped 5 percent to 12.4 billion bushels in 2010 from 13.1 billion bushels in 2009. The average yield fell to 152.8 bushels per acre from 164.7 bushels per acre in 2009.
Soybean production slipped to 3.33 billion bushels from 3.36 billion bushels in 2009. The average yield was 43.5 bushels per acre in 2010, down slightly from 44 bushels per acre in 2009.
Don Roose of U.S. Commodities in West Des Moines said the nation is down to a 20-day supply of corn and higher export demand is expected.
“The market will  have to start rationing in order to satisfy demand and that will lead to higher prices,” Roose said. “The last time we were this tight on supply was in 1995-96 when we first had $5.50 (per bushel) corn. We had large demand with China buying and a shrinking crop.
“That year, we had an 18-day supply of corn. We’re in a very similar situation this year.”
Corn prices have risen since June due to excessive rainfall in parts of the U.S. Corn Belt, a drought in Central Asia, reports of hot, dry weather and a smaller corn crop in Argentina and higher demand from ethanol producers.
With export demand expected to be 4 percent higher and the livestock feed and ethanol industries bidding for corn, Roose believes someone will have to take a cut, something the ethanol producers were forced to accept when corn last topped $7 per bushel.
“I think we’re on this treadmill for years to come,” he said. “This is not a flash in the pan. Ethanol is consuming 38 percent of our corn production.”

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