In the past 2 weeks we’ve been hearing reports of the battle for the remainder of this year’s corn crop. On July 25 I wrote about the battle for the available supplies using local basis bids versus historic bids to see how tight supplies might become.
It appears that we’re going to have enough corn to feed. While it may be at a price we don’t like (bid is $7.61/bu at Sioux Center, Iowa this afternoon), at least the basis has lowered, suggesting supplies will be adequate. On July 25 Sioux Center was bidding +$0.33 while the basis bid today is only $0.08. I did an internet search of other corn purchase sites that I routinely check and all of them have dropped their basis bid by $0.30-40/bu from the July high. I even saw a covered pile of corn at a regional coop that grinds a lot of hog feed this morning. It looks like feed supplies, while expensive, will be adequate.
However, the results of the ProFarmer crop tour are sure to make feed grains even more expensive. They peg the US crop at only 12.48 billion bushels and 147.9 bu/a, well short of the 13+ billion and 160 bu/a that everyone was hoping for when we put the crop in the ground.
The disappointment in the size of the crop and the resulting increase in price has already shown up in feeder pig and SEW prices. Today’s USDA Feeder Pig price report had a low of $5 for SEW pigs, something we haven’t seen since August of 2009. The absolute spread in price (from $5 for the lowest price paid per pig delivered to $47 per pig delivered) is the widest I’ve seen since I’ve been tracking the data.