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Originally published July 7, 2014 at 5:11 PM | Page modified July 7, 2014 at 7:59 PM

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Corn crop may set record; prices sink

Even after fewer acres were planted, the wettest June on record left fields in the best condition since 2003 and sent prices into a bear market two months before the harvest starts.


Bloomberg News

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The 8-foot corn stalks on Bill Long’s farm in Southern Illinois are so big, green and healthy that he wishes he’d sold more of it sooner.

Like many growers across the Midwest, Long expects a second straight record crop that will boost domestic stockpiles already at a four-year high.

U.S. output will jump 2.8 percent to 14.314 billion bushels, the most ever, researcher the Linn Group estimated in a report last week.

Even after fewer acres were planted, the wettest June on record left fields in the best condition since 2003 and sent prices into a bear market two months before the harvest starts.

“There is a wall of grain coming at us,” said Roy Huckabay, an executive vice president at the Linn Group in Chicago.

Two years removed from a devastating drought that damaged crops and sent prices surging, farmers will see yields rise 4.1 percent to an all-time high of 165.3 bushels an acre, government data show.

Rising grain output in the United States, the world’s largest producer, is keeping global food prices in check while boosting profit for meat producers including Tyson Foods and makers of sweeteners and ethanol including Archer-Daniels-Midland.

Futures have tumbled 22 percent since the end of April on the Chicago Board of Trade, slipping into a bear market July 3. Prices Monday reached $4.03, the lowest since August 2010.

Corn’s slump may worsen once the harvest starts. In separate reports, Goldman Sachs Group said June 23 that prices will drop to $4 in six months, while Rabobank International said last week that the grain will average $4.07 in the fourth quarter. Dan Basse, the president of AgResources in Chicago, predicted a drop as low as $3.50.

As of June 29, 75 percent of the crop was in good or excellent condition, compared with 67 percent a year earlier and the highest at this stage of development since 2003, the U.S. Department of Agriculture said.

“Right now, it looks as good as it did last year when we had a record harvest,” Long said from Franklin, Ill., where he farms about 3,000 acres with his son. “We have moisture in the ground and mild temperatures for successful pollination. We are ahead of the game.”

In Iowa, the top U.S. grower, fields show “phenomenal yield potential,” said Todd Claussen, director of agronomy at Ames-based Farmers Cooperative, the largest member-owned grain elevator and farm-supply company in the state.

Claussen said farmers planted more seeds per acre than ever and predicted yields in Iowa may near the record of 182 bushels an acre in 2009.

As much as two-thirds of the U.S. corn crop will push through the critical pollination period by July 20, the Commodity Weather Group said in a report to clients July 1. There are no signs of sustained heat, and moisture will be generally adequate, aiding development for “better-than-average yields,” the forecaster said.

“There will be a mountain of grain at harvest this year,” AgResources’ Basse said. “There are some blemishes along river and creek bottoms and some hail and wind damage, but it’s the best crop I’ve seen since at least 1994.”



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