Mary Hightower

August 10, 2010

3 Min Read

Arkansas producers enjoying higher wheat and corn prices will be hoping Friday the 13th won’t arrive a day early with USDA’s Aug. 12 crop production report.

The “August Crop Report” contains the first corn yield estimates of the year that are based on actual field samples.

“Like other crops, corn has likely been pulled higher by the wheat market over the past month,” Scott Stiles, Extension economist-risk management for the University of Arkansas Division of Agriculture, said.

“There is some disparity in growing conditions across the Corn Belt, although the National Agricultural Statistics Service currently indicates that more than 70 percent of corn acreage remains in good or excellent condition,” he said.

Arkansas corn was looking good, according to Monday’s report from the statistics service, with 57 percent rated good or excellent. Progress wise, 56 percent was mature, compared with 12 percent last year and the 17 percent five-year average.

“Take wheat out of the equation and traders are looking at record corn production, which could have a major impact on the market,” Stiles said. “There were brief periods in July when corn would detach itself from wheat as traders reminded themselves that this year could end with record production and yields here in the U.S.”

July was a volatile month for September corn futures, trading from a low of $3.60 to a high of $3.96, ending the month strongly at $3.92.

Price volatility in July kept the basis fluctuating from week to week. In some locations the basis has gotten weaker over the past month.

For example, corn basis at Memphis, Tenn., has gone from 16 under September futures in the first week of July to 25 under on Aug. 6.

Similar basis changes occurred on the Arkansas River, with basis widening from 18 under to 32 under over the past month. The White River basis has been more stable staying in a range 23 to 29 under over this time frame.

“Through the first week of the month, August has been positive for corn futures,” he said. “The September contract traded at its highest levels of the summer, going as high as $4.25 on Aug. 5, before backing off to close at $4.05 on Aug. 6.”

Prices closed at $4.03 on Monday.

As of Aug. 6, growers around eastern Arkansas are seeing bids for their corn in the range of $3.70 to $3.80.

“We saw a similar spike in corn futures in the first week of August a year ago,” Stiles said. “On this date last year, September corn closed at $3.32. The extra 67 cents or so per bushel is certainly welcome in this expensive year.”

Arkansas growers planted 420,000 acres of corn in 2010, down slightly from 430,000 in 2009, according to the National Agricultural Statistics Service. Arkansas’ corn acreage peaked in 1934 at 2.6 million acres. The last time corn acreage breached the half-million acre mark was in 2007, with 610,000 acres planted.

For more information on crop production in Arkansas, visit http://www.uaex.edu, or contact your county Extension office.

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