Trading turmoil leads to plunging corn prices - KWWL - Eastern Iowa Breaking News, Weather, Closings

Trading turmoil leads to plunging corn prices

Posted:
FREDERICKSBURG (KWWL) -

A new report from the U.S. Department of Agriculture is leading to a significant drop in corn prices. The USDA released its final report on the 2011 harvest Thursday morning.

Iowa farmers saw a near-record corn yield of 172 bushels per acre. Nationwide, farmers did better than expected -- harvesting an estimated 12.3 billion bushels of corn, with a surplus of 844 million bushels.

The problem is, traders were only expecting a surplus of 750 million bushels. The news led to corn prices plunging on the Chicago Board of Trade.

Fredericksburg farmer Jeff Pleggenkuhle spent Thursday afternoon inside the local Farmers Coop.

"Planning for the upcoming year, and getting some input," he said.

He's also talking about news that tends to shake things up this time of year. The USDA annual Harvest Report.

"One way or another, we either had corn up the limit or down the limit the same day of the report. It's a big report, and can go either way. We just weren't expecting it to go this way this year," said Jim Erickson, General Manager of the Fredericksburg Farmers Coop.

Farmers were planning for slightly lower yields from the December estimate. Instead, the USDA increased the yield by about a half bushel, and reported a surprising amount of surplus corn in storage.

"Consequently, we have corn down 40 cents in the futures and beans down about 24 cents. Kind of a reaction we weren't anticipating," Erickson said.

What does this report mean for farmers like Pleggenkuhle? Well. he's certainly paying attention, but he's taking the news with a grain of salt.

"It's just today. Next week it could be different," Pleggenkuhle said.

Erickson agrees, farmers don't need to panic at the lower prices.

"Some of them are saying, well gee, I probably should have sold. But they'll get another opportunity here. I don't think it's over yet, because it wasn't that drastic of a report," he said.

It is a chance for buyers to lock in a good deal.

"Maybe an opportunity for someone to buy, if they haven't bought their needs yet. If they're a livestock producer," Erickson added.

But if you don't need to sell, Erickson suggests follow Pleggenkuhle's lead. Focus on the upcoming spring, instead of a potentially brief swing in prices.

"Anymore, nothing surprises you!" Pleggenkuhle joked.

Powered by Frankly