With the wide basis for new crop corn and soybeans, a large majority of Midwestern corn producers are now looking at corn for December delivery at $4.90/bushel, or lower and November soybeans priced at $12.75/bushel or lower.
For decades the United States was the bread basket to the world. After World War II, grain exports from the US were being sent to new ports where, years earlier, battleships were needed for protection and military engagements. The US had the best technology, farmers embraced new methods of farming and acres and acres of tillable land were and are now planted with seeds of science.
However, today the US is just one of the many loaves in the basket. Fortunately, US grain producers have maintained their desire to be stewards of the land and in doing so the US continues to be one of the stronger exporters. There is powerful competition to take market share from the US.
One of the most striking examples of the need to export grain came when the US embargoed wheat to Russia. In 1980, President Carter placed an embargo on wheat sold to Russia because of the Russian invasion of its southern neighbor Afghanistan. In 1980, wheat prices rallied from a low in June to late October because of a dry summer in the US and good demand. Chicago wheat went from below $4.40/bushel to climb over $5.50/bushel. When the embargo was placed on Russia, it took less than a month and a half to give up the entire gain of the summer rally. (more)
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