ART HOVEY Lincoln Journal Star
LINCOLN, Neb. - A year ago at harvest, Nebraska farmers were suffering through a drought of historic proportions.
As harvesting equipment hits high gear in 2013, yields are likely to be back in a much more comfortable range. "It's, surprisingly, quite good," Rising City farmer Bart Ruth told the Lincoln Journal Star (http://bit.ly/19k690J) when asked to assess the results from the 900 acres of soybeans his family has harvested over the past 10 days. "We thought, with the limited rainfall this summer, it would not be where it's at," he said Wednesday. "But it's been outstanding."
The pace of harvest varies from year to year, and so do decisions about how hard to hit the soybeans versus the corn in the early going.
This year, corn maturity was slowed by low temperatures.
And this year, said Victor Bohuslavsky of the Nebraska Soybean Board, the soybeans are fully ripe, in many cases, even though the stems of soybean plants are still green.
When moisture levels of beans dry down toward 10 percent, the risk rises that pods will shatter and the contents will fall on the ground.
"So it's time to get them out," said Bohuslavsky, who was doing that very thing Wednesday on ground he farms near Brainard.
"We've just cut one field," he said, "and the beans were nice quality and everything. And we're right in the mid-40s range with them" in bushels per acre.
Reviews aren't nearly as glowing on the price front as the time comes to get the crop in the bin.
A bushel of corn, worth more than $8 in last year's weather market, was struggling to hang onto $4 this week in cash transactions. Corn futures hit a three-year low Monday.
Soybean prices, although down sharply from last week, were holding together better at $12-plus per bushel as Ruth assessed the soybean-corn comparison Wednesday.
Much of the time, corn pencils out better when yields and prices are taken into account. This year, perhaps not.
"It will take a tremendous corn crop to gross the same return per acre as we'll get off soybeans this year," Ruth said.
Forward contracting of grain production, supported by crop revenue insurance, puts farmers in a position to lock in on a much better price, ahead of time, than they can get at harvest.
But the sharp descent of prices is still cause for concern.
Clay Bradley, a Lincoln commodities trader, said the cash price for corn might fall below $4 before it stabilizes.
"I think the worst is over," he said. "I wouldn't be surprised to see prices lower, though."
A bottom of $3.98 or $3.99 is possible.
"I'm not predicting it, but I think that's the extreme - and we're very close to that right now."
Much of the explanation for lower prices is simple: A good crop tends to undercut them. But Bradley said worldwide production of both corn and soybeans is much more important than it was when he got into the grain-trading business in the 1980s.
Then, the Hunt brothers of Texas were under investigation for trying to corner the soybean market by buying up more than 20 million bushels, almost eight times the legal limit of that era.
Although government allegations were never proved, Bradley said, "you could kind of do it back then."
"We were the residual producer," he said. "Whatever we had - the world was essentially out of soybeans, except for us, by July or August."
In contrast, one of the factors contributing to soft corn prices in Nebraska in October is the big gain in corn output in Brazil, Russia and other countries that used to depend much more on U.S. exports.
Drought in the United States in 2012 added to that momentum.
"They're raising a whole lot more corn and they're exporting it," Bradley said. "And they've been exporting as quickly as they could over the last couple of years, as we've devoted more of our corn to ethanol production."