Lower prices and a wider basis may be in the offing for corn in the Dakotas, says Matthew Diersen, South Dakota State University Extension grain marketing specialist.
"The added acres in South Dakota and the region suggest a wider basis at harvest," he says. "The outlets for additional supply will likely be local feed markets, replenished stocks, and exports."
USDA had pegged the U.S. farm price for corn at $5.00 per bushel for 2012.
The price in South Dakota is typically 91% of the U.S. price,"Diersen says. "Thus, the 2012 marketing year average price in South Dakota was expected to be $4.55 per bushel. The large increase in acres greatly increased the U.S. supply picture, which will likely result in a lower U.S. price and a lower South Dakota price."
In its Prospective Plantings report issued March 31, USDA predicted that South Dakota will have 5.5 million acres of corn in 2012. That compares to 5.4 million acres in 2011. However, acres for other crops did not change enough to account for only increasing the corn acres by 100,000, Diersen says.
"Thus, some uncertainty remains for the potential acres for corn," he says.
A major trend in South Dakota has been a consistent move toward harvesting a greater percentage of the corn crop for grain.
"If the trend continues, expect to see 95% of the planted acres harvested in 2012. Thus, the expectation is for growers to harvest a record 5.225 million acres of corn in the state. The yield trend suggests an increase of 2.2 bushels annually in the statewide average. Thus, the expected yield for 2012 is 136 bushels per acre. Combining the harvested acres and yield forecasts, 2012 production is expected to be 711 million bushels, just exceeding the previous record of 707 million bushels in 2009."