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Grain outlook 2011 —

By Staff | Nov 19, 2010

Despite harvesting the third-largest corn crop and largest-ever soybean crop, ending stocks are forecasted to grow smaller by 2011 due to high demand.

Iowa grain producers are looking at the best of both worlds when it comes down to 2011 planting intentions.

That assessment came from Chad Hart, an Iowa State University grain markets specialist on Nov. 10 during the Pro-Ag Outlook Conference at the Webster County Extension office.

Hart was outlining that growers are looking at the reality of locking in $5-plus per bushel for corn and $12 or more per bushel for soybeans to be harvested next fall.

Hart’s projections show that in 2011, producers can be looking at $3.80 to produce each bushel of corn, while 2011 prices appear to be at or higher than $5.40 per bushel.

Likewise for soybeans, hart’s outlook show production costs of $9 per bushel, and sales of $12 or higher in 2011.

Despite harvesting the third-largest corn crop and largest-ever soybean crop, ending stocks are forecasted to grow smaller by 2011 due to high demand.

The reason for the high futures prices, Hart said, is extremely low ending stocks by the 2011 harvest.

“We finally got an accurate crop report,”?Hart told an audience of ag bankers and financiers, referring to the Nov. 9 U.S. Department of Agriculture’s crop production report. “We had the third biggest corn crop ever,”?Hart added, “but it’s still considered a short crop due to steady demand for corn.”

Hart tempered the discussion, however, saying he’s not in agreement with the USDA’s projection that the ethanol industry will use $4.8 million bushels this year.

“I’m nervous for ethanol,” Hart said. “With rising prices and the (blenders) tax credit sunsetting on Dec. 31, we may not see ethanol using 4.8 million bushels.

“If we are looking at $5.20 as an average price for the year, how can any of these demands keep growing?”

Chad Hart, an Iowa State University Extension grain markets specialist.

Consequently, the soybean crop was the biggest the U.S. had ever produced and still prices look to average for 2010 at $11.45, according to the USDA.

Hart noted that China remains the biggest foreign purchaser of U.S. soybeans.

“China has bought enough (U.S.) soybeans to match Iowa’s harvest,”?Hart said. “They are very aggressive both here and South America.

“In fact, the U.S., Argentina and Brazil are all dependent on selling soybeans to China.”

Acre competition

Because of the profitability potential next year, virtually all grain crops will be competing for more acres in just about every Midwest state except Iowa.

Iowa doesn’t have any significant growth room for planting more acres as a whole, Hart explained.

However, he said, 2011 Iowa planting intentions may not change beyond established rotations since there is profitability potential whether growers plant corn or soybeans.

Contact Larry Kershner at (515) 573-2141 or kersh@farm-news.com.

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