Web exclusive posted June 2, 2008 at 10:40 a.m. CST

Favorable growing conditions will be needed to offset the yield loss for corn expected from this spring's delayed planting. That's according to Farm Futures Market Analyst Alan Suderman, who explained during a May 27 webinar that "if you consider planting delays only, you get a trend line that would point toward 145 bushels per acre [average national corn yield]." Last season's average was 155 bushels per acre, which still could be met this year if the corn crop sees ideal growing conditions.

The central and eastern part of the Corn Belt has the potential for good growing conditions, with the western and northern Corn Belt likely to experience hot and dry conditions which will extend into the Southwest according to CropCAST Services meteorologist Joel Widenor. With the strong La Nina currents in the Pacific Ocean weakening, the weather pattern is suggesting there may be a cooler summer for much of the Midwest, similar to the summer of 2000. "Planting delays have pushed corn pollination dates later in most areas," Widenor said. "Areas of the northwestern Midwest will be at most risk for reduced yield potential due to the proximity of pollination with the heat. The southern and eastern Midwest forecast looks more favorable."

The Farm Futures staff, in projecting various scenarios, believes a short crop in 2008 would send seasonal market highs up to the $8 per bushel range, and even as high as $12 or $14 per bushel if there were a crop disaster severely reducing production. Normal yields for 2008 could still generate seasonal market highs above $7, and if a really big crop develops the highs should be $5.78 to $6.58. "With the good soil moisture conditions and relatively cool outlook, it could result in better than expected yields," said Bryce Knorr, Farm Futures senior editor.

The high futures markets aren't being transferred directly to the countryside, however. "The basis is terrible due to high transportation costs," Knorr said. "Ocean freight rates are at all time highs, caused by strong demand out of China and India for coal and ore as well as agricultural commodities. This is being passed on to the farm in the form of weaker basis." Similarly, barge rates on the Mississippi River are higher than normal for this time of year. "We could see extremely weak fall basis at harvest unless we get into a short harvest," he said. Basis is calculated in each local market by subtracting the local cash price from the nearby futures contract price, a difference which reflects local demand and freight.