September 13, 2017
Harvest 2017 is rapidly approaching. We have been working diligently to make room for what we hope will be an abundant harvest. With that being said, planning space needs for 2017 has been very difficult from the elevator perspective.
There were many early sales of soybeans last spring and the purchase book is only slightly below normal. Corn however is a different story. With prices never moving much beyond break even, farmer selling has been extremely light. As I look at available space contrasted with purchases, storage space looks quite comfortable. Twenty years of experience have me believing otherwise. My peers in the elevator business confirm that the situation is similar across our state and maybe across the country. Relatively large carries have grain elevators and ethanol producers with much larger inventories than normal. Most believe that pre-harvest bushels will be the cheapest grain all year with cash basis reflecting a strong recovery post-harvest. The questions will be whether or not that will hold in the face of harvest and how the producer captures the stronger basis in December and beyond.
I don’t have the answers for what has been a very difficult marketing year. Here are some of the factors which I believe will come into play this year.
Commercial and on farm storage space is limited and a plan for delivering grain is important.
Post-harvest basis improvement will be determined by farmer selling at harvest. Do not be surprised if elevators force cash sales once ground piles start.
Sales will depress basis recovery.
Futures prices are near contract lows and many analysts look for futures prices to improve during harvest and beyond.
The sooner that you make a plan, the more options you will have.
What does all this mean at Pride Grain? Those who have contracts will be guaranteed storage space. Storage will be available for corn and beans on a first come first served basis. To make sure that you have space a contract will be necessary. Consider a basis, HTA or a minimum price contract to fit your individual need.
Open storage as available will be offered with the same terms as in the past. Up to 30 days free storage for grain sold before 30 days. Grain not sold within 30 days will be moved to open storage which requires the purchase of 120 days of storage at a cost of $.18/bushel. Grain stored over 120 days will accrue daily storage at $.0015/bushel/day. ($.045/bushel/30 day month).
Beginning drying charges will be the same as last year, $.02/bushel/point for 15%-18% moisture, $.03/bushel/point for 18%-20% moisture and $.05/bushel/ point over 20% moisture. I would anticipate limited drying demand due to low prices. If you are planning to deliver grain over 18% moisture, please let us know in advance.
In the event that a ground pile becomes necessary, we may require that some or all bushels delivered at that time be priced across the scale. The more a producer communicates his intentions, the more effective we will be managing the logistics of harvest. Let’s work together to make the most of what I expect to be a logistically challenging harvest. Of course, drying, storage and other terms and conditions are subject to change at any time.
Please call the office (402) 273-4468 or my cell phone (402) 760-1278 so that we can discuss your individual needs. As always, Pride Grain looks forward to serving your grain marketing and storage needs.