Cash Strategist 7 31 2024

Price scenarios as harvest approaches

As we wind down July, the farmer's attention will quickly turn to harvest preparations. Combines will be serviced and pulled out of hibernation, wagons will be greased and checked over, and by-hand yield checks will be the talk of coffee shops.

But as the growing season winds down, there remains a number of different possibilities as far as the balance sheets are concerned on how the rest of fall proceeds.

Starting with corn, let's look at a few different factors that are still undecided and how they will affect the bottom line.

Yield is obviously the biggest question mark still remaining and the factor that likely makes the most difference on ending stocks and stocks-to-use ratios. The U.S. Department of Agriculture (USDA) currently has yield estimated at 181 bushels per acre, which produces ending stocks of 2.097 billion bushels and a stocks-to-use ratio of 14.1%.

Raising yield to 183 bushels per acre and leaving everything else the same produces an ending stocks figure of 2.259 billion bushels and a stocks-to-use ratio of 15.2%. Inversely, lowering yield to 179 bushels per acre and leaving everything else the same produces ending stocks of 1.926 billion bushels and a stocks-to-use ratio of 12.9%.

Acreage is another factor that could still fluctuate.

Leaving yield at the USDA's 181 and adjusting harvested acres higher by 1.5 million results in ending stocks of 2.382 billion bushels...