To harvest or not to harvest…yet, that is the question

It is that time of year again when the farmers get their harvest equipment ready and head to the fields. They are excited to see what their corn stands are like and most importantly their yields. And every year it seems like a race to the finish line. Farmers see other farmers in their fields and they become antsy even though they know their own fields aren’t quite ready. Maybe it’s that competitive nature, maybe it’s that “I can’t sit still and watch others work” mentality, or maybe it’s just their mind worrying about what might happen with the weather if they don’t get going.

Maybe I’m a little green, and all emotions aside, I think we are ok waiting one more week to see our corn get dry enough naturally in the fields without having to run any of it through the dryer. We are very close to the perfect moisture levels we need to sell and store our grain, that it seems a little premature to harvest.

In most years, our operation starts harvesting soybeans around the 29th of September. Do I think our soybeans will be dry enough by then? Yes. Do I think our corn will be dry enough by then? Yes. In a normal year, corn is not ready to harvest by the end of September. Its prime time is mid-October. Usually there is not a question as to what to harvest first. But as you know, this is not a normal year. The drought and high temperatures this past summer shortened the corn season and therefore made it ready to go a few weeks to a month ahead of schedule. While beans received adequate moisture in August here to remain on schedule.

Maybe we are too anxious to see what kind of yields we have. Maybe we are too worried about what could happen, the “what-if” syndrome, to think rationally. Maybe all the volatility in the markets and the world are making us a little crazy. Whatever it is, I think we need to look closely at our own operation and focus on just that…what is good for us.

As a side-line player this harvest due to being almost 9 months pregnant, I don’t have much say in when to say go. But from what I have seen from walking our fields the last few weeks, the preliminary reports from our combine and operator, and the weather outlook, I think we can gain to wait for one more week.

2012 Crop tour yield estimates

If you read this blog, I have focused on the weather most of the summer. The commodity markets turn into a weather market during the summer, and what volatility we have had! The lack of moisture has made prices go up then down then up again then down, etc., etc. Traders pull money out one day, then the next, put it back in.

Many times, traders look at the weather in Chicago only. If Chicago is raining during a dry spell, prices drop, even though it is still dry in Iowa. Traders aren’t farmers.

They also seem to heavily rely on USDA crop reports which are not always (usually) accurate. Again, traders are not farmers.

This week, an industry crop tour took
place, with results confirming that yes, we have a supply issue due to drought across the Midwest. According to their estimates, the corn crop will be 10.478 billion bushels with a yield of 120.25 bushels per acre.

To have a comparison, if the corn producing areas of the country had had adequate rain, we would be yielding on average 180 -190 bushels per acre.

The soybean crop is estimated to be 2.6 billion bushels with a yield of 34.8 bushels per acre. With adequate moisture and normal temperatures, an average yield would be 45 bushels per acre.

With this information in hand, one would think prices would have hit a limit today. But no. Markets got a little excited this morning, then dropped to last week levels. In my opinion, the market feels heavy, like it’s lugging around an 800 pound gorilla on its back. Any rallies lose momentum in a day. We are now exiting the weather market, so those spurts of rain here and there will not have anymore effect on commodity prices…unless do I dare say, we can’t get into the fields to harvest because it won’t stop raining! Oi vay!

So the big question is, is when will the trade realize there is a shortage of grain? I mean, we farmers know better than anyone what our own crops look like and what our average yields will be. And most of us are waiting for prices to move toward and closer to $9. The potential is there, all the ducks are in a row, but something is holding traders back. Someday soon the supply and demand will affect the markets. One would think it would be about now…