October 25, 2000 | By: Laura Skillman
PRINCETON, Ky.

The U.S. Department of Agriculture's October crop production and world grain supplies and demand estimates provided some good news and possible opportunities for farmers to gain better prices for their crops.

The markets over the coming months can offer farmers opportunities to make a profit on corn, wheat and soybeans, said Steve Riggins, a University of Kentucky Cooperative Extension Service agricultural economist. But, he's not predicting substantial price gains across the board.

"We are not talking three-dollar-corn, but farmers will have the opportunity to market well above county marketing loan rates," he said.

The key for farmers to take advantage of pricing opportunities is to have a marketing plan in place and to use it. The plan will allow farmers to know what prices they need to make a profit and at what price levels they are willing to begin selling. When prices reach those levels, farmers need to use their plans and begin making some sells.

The USDA reported record domestic demand for corn and the fourth highest export market resulting in an estimated need of 10.1 billion bushels. Meat consumption is helping drive domestic use but uses for products other than feed also are up, making for a record-use of 7.835 billion bushels.

It has taken low prices to up that demand, Riggins noted. China will play a role on exports. Predictions are that their crop heavily has been drought-damaged. Some experts predict they will still be an exporter, however, Riggins said he and some others are wondering if that will happen or if China may end up buying corn instead.

The situation with soybeans is somewhat mixed, Riggins said. Domestic demand is at a record pace and exports are just under last year's record level. But, the U.S. soybean demand was lowered from the September report as was production projections.

Two things controlling the soybean market now are harvest pressure in the United States and planting time in South America. South America is expected to plant record acres, while U.S. production for 2001 is not expected to fall. Also, total global oilseed crops are at record numbers.

Riggins said farmers need to look for opportunities to price their soybeans above the marketing loan rate which is $5.40 to $5.50 for many counties.

"There may be some shots to price above that," he said.

Wheat prices have rallied some in recent weeks and the wheat situation looks favorable on a global level. Stocks to use are at the lowest level since 1995 and 1996 when farmers enjoyed $5 per bushel wheat prices. But, Riggins said, while the world cupboard is close, a factor limiting the market is excess supplies are in the major exporting countries such as the U.S. and Australia.

Riggins said he is hopeful of a gradual and modest upswing in wheat prices.

For more information on grain marketing, contact your local Extension office.

Contact: 

Steve Riggins, (859) 257-7256