Storage facilities under bumper crop pressure

Fall harvests of corn, sorghum and soybean are expected to be high, leaving the Midwest with storage concerns, according to reports. A lackluster demand for the abundant winter wheat crop is causing storage problems as overseas buyers watch and wait as prices fall. With a strong fall harvest on the way, storage will be difficult to come by.
Some grain will be “placed on the ground in some areas,” said Tom Tunnell, executive director of the Kansas Grain and Feed Association. This leads to problems for elevator operators as crops stored in this manner typically have much higher rates of spoilage.
Some winter crops have been stored in Oklahoma where crops have been poor, making storage space available.
Wheat futures on the Chicago Board of Trade are trading around $4.5575 a bushel, down from August’s $5.7725.

Monsanto expects corn, soy to be profitable

Despite cutting nearly 2,000 employees, Reuters reports Monsanto is set to introduce its new corn and soybean products next year.
These lines are projected to provide a third of gross profits in three years and expects a launch on 10-12 million acres. The new products are Genuity SmartStax corn and Genuity Roundup Ready 2 Yield soybeans.
Further news that the company’s restructuring plan will provide significant cost cuts helped push Monsanto shares up 42 cents at $78.50 in pre-market trade on the New York Stock Exchange.

USDA lowers corn price estimate

The U.S. Department of Agriculture lowered its 2008-09 average corn price estimate to $3.55 to $4.25/bushel in a January 12 report, 10 cents below the previous month’s report.
The World Agricultural Supply and Demand Estimates (WASDE) place this year’s soybean prices at $8.50 to $9.50 per bushel compared with $8.25 to $9.75/bushel last month. Soybean meal prices are projected at $250 to $310 per short ton, up $10 on both ends of the range.
On wheat, the projected season-average farm price is narrowed 10 cents on both ends of the range to $6.50 to $6.90/bushel.
On coarse grains, USDA reduced feed and residual use by 50 million bushels, reflecting lower animal numbers and September-November disappearance as indicated by December 1 stocks.
In addition, the department lowered ethanol use by 100 million bushels as sustained negative ethanol production margins have reduced incentives for ethanol output. Looking at other crops, the sorghum season average farm price is lowered 10 cents to $2.90 to $3.50/bushel; barley narrowed 10 cents to $4.95 to $5.35/bushel; and oats raised 10 cents to $2.90 to $3.10.
The WASDE report reflects a lower meat production estimate from the previous month, with reduced 2009 broiler and pork production.
Beef production forecasts for 2009 are unchanged.