Ohio farmers, itching to plant, watch markets continue lower

Talking to a farmer near Hiram yesterday revived a story Dad told me 40 years ago. This farmer wanted to replace his combine and one tractor, and was seeing prices for good used equipment off short-term leases that were almost unbelievably cheap. The problem was, he could not justify them with the grain prices I was talking up to him.

I remember asking Dad about a small farm behind our home farm that cut the tract off so it was not a full 160 acres.

“Did you ever get the chance to buy it?” I asked.

His answer was simple. Yes, his mother could have purchased it in 1932, for $25 an acre.

“Then why didn’t she?”

“In 1932, she didn’t have $25 an acre.”

Boom goes bust

Farmers who have been flush with cash from record high grain prices and from the shale oil patch have been aggressive for three years in upgrading equipment and buying that farm on the other side of the township they have always lusted after.

That was then, and this is now.

Now we are looking at prices that have us wondering if there will be profit in farming with any but the best crop yields. Now we are agonizing about forward contracting corn and beans, and wondering when to pull the plug on needed corn sales. Now we are wondering if some of our price-inflated inputs will ever get cheaper again.

I remember $64 per ton potash. I remember $3.50 corn. The $3.50 corn is back, but the potash is still over the moon.

Market lows

Corn and wheat prices made new contract lows on the Chicago Board of Trade this week, but the soybeans continued to be a little better.

Call this a reaction to a return to planting that has progress almost back to normal, although not in Ohio. Call this a reaction to good weather reports that say we are going to catch up, and in time to hit the optimum growing date for much of the crop. Call this a reaction to a feeling of relief that we might not switch corn acres to beans on late planting. And of course, as they say in Cherry Valley, just don’t call me late to supper!

It was not that long ago we had that urgent feeling that we could wait until after the March 31 USDA Planting Intentions Report to price corn. The hopeful feeling was that the acreage projection would be cut several million acres, and prices could rebound. The market must have felt that, because early trading had us higher, making the 4.06 July futures recent high just before the release of the report.

When the report came out, disappointment gave us a 3.83 1/4 low the same day. We had follow-through to 3.81 3/4 the next day, but traded higher during the day. Then, we rebounded for two days. There was a nearly-audible sigh of relief in farm country. The relief did not last long. Except for four days of respite, we have been lower almost every day since. Four of the last five sessions have given us new contract lows.

Still sagging

This morning, April 28, was no exception. Forget “Turnaround Tuesday.” In early trading we hit a new July corn futures low of 3.62 3/4 this morning. Yuck!

The new recent lows are certainly a projection of better planting progress possibilities, but great exports have helped, too. We shipped almost 51 mbu this week, way over the expected 31 to 37 mbu.

Although Ohio only gained 1 percent in planting progress this week, to a grand total of 2 percent, the U.S. went from 9 percent last week to 19 percent this week. Ohio is normally at 20 percent, the nation at 25. Key states made real gains, with Iowa up to 14 percent from seven, and Illinois now at 31 percent, up from 15.

Add to the progress a weather report that projects some real progress in the East, and you have a return to normal in the minds of traders. Of course, the traders will be sleeping normal hours while the farmers work around the clock, but there is plenty of time to sleep in December.

Soybeans have also had great exports, as we shipped 11.5 mbu. The continued bean rebound, however, probably comes from relief that the corn will maybe get planted. July futures put in the low at 9.49 on the tenth, then the high on the 23rd, at 9.85. We are currently 9.81, up eight cents.

Meanwhile, July wheat, with good exports, moisture in the southern Plains, and good spring wheat planting progress, made a new low Monday, and then again this morning. We are currently at 4.72 on the July.