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Market Commentary

Afternoon Comments 06/18


Tight old crop conditions seemed to support corn futures Tuesday morning, with wire service sources citing cash market strength, particularly in the western Corn Belt, for early CBOT gains. Meanwhile, concerns about the ultimate size of 2013/14 crop with summer heat looming apparently boosted the deferred contracts even more substantially. July corn closed 4.75 cents higher at $6.7325/bushel Tuesday afternoon, while December jumped 12.0 cents to $5.505.
Market Info

2012 drought impacts 2013 seed corn

Colleen Scherer, Managing Editor, Ag Professional  |   February 20, 2013
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The devastating drought of 2012 damaged many crops and reduced yields. But the drought also hurt the production of seed and seed companies report that less seed corn is available this year and at a lesser quality.

Farmers who have not already ordered their seed by now will likely be the most impacted as supplies are decreased and what is available will be of lesser quality.

Jim Zook, executive director of Michigan Corn Growers Association said Michigan farmers needed to get seed ordered and delivered as soon as possible.

“I just had an agronomist from one of the major seed companies in yesterday,” Zook told MLive.com. “What’s happening is with last year’s extreme weather conditions, the quality of seed is in jeopardy. Some varieties did not weather the weather very well, and now the seed is not meeting stringent standards.”

It is believed that the damage to the seed was done early in the season even though harvest went well. Extreme conditions during the growing season are believed to have put a strain on the seed coat, which affected the seeds’ ability to go through processing after harvest, Zook explained.

“They are finding germination is falling off from where it needs to be,” he said.

Farmers have a few options in dealing with lesser quality seed. These options include:

  • Factor in lower germination rates than usual when calculating how much seed they will need for the yields they want.
  • Switch to other, less desirable varieties that may have higher seed quality available.

“A majority of the seed is already ordered,” Zook said. “But just because it’s ordered doesn’t mean they are guaranteed to get it.” He recommended that growers work with the dealers for delivery as soon as possible.

Retailers have likely been aware of the issue as far back as right after harvest. Seed companies do not expect a shortage of seed, but they are aware of variety quality concerns, according to Christy Toedebusch, public affairs director for Monsanto.

“We manage supply to meet demand every year,” she said. Detasseling of seed corn is underway in Argentina and Chile right now to meet U.S. farmer needs, she said.


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