By ANN HINCH
Assistant Editor

CHICAGO, Ill. — Late combining and high moisture combined for a slight shift downward in corn harvest projections in the USDA’s November Crop Production report released Monday, from 12.2 billion bushels last month to 12 billion this month.

Two market analysts speaking from the Chicago Board of Trade speculated farmers will store as much of their 2008 crop as possible, that they hadn’t already sold ahead. Jack Scoville of Price Futures Group explained corn harvest is going slowly as growers try to let the crop dry longer in the field, and soybean farmers are not selling their harvest as easily, either.

Part of the reason, he said, is because farmers tend to hang on to what they have in poor economic times, anticipating higher prices. That could happen with soybeans, he said, pointing to the USDA’s projection that Brazil beans will harvest 4 percent lower than last month’s expectations.

“You have some good chances for lower production out of Brazil,” Scoville explained. “They’re not buying inputs like they should.”
According to an Associated Press report last week, Brazil’s Agriculture Ministry blames the worldwide credit crunch and elevated production costs for lower anticipated production this winter. Scoville said fewer soybeans could also be the case in Argentina, which had been anticipating record plantings.

For domestic soybeans, the USDA is projecting a 2.92-billion-bushel harvest, down less than 1 percent from October’s report, based on a slightly lower average yield of 39.3 bushels per acre.

Gavin Maguire of EHedger LLC believes soybean exports will trend higher rather than lower in 2009, unlike corn and wheat.

He explained corn has to compete globally with feed wheat, which is less expensive, and wheat for now is abundant. Both he and Scoville believe meal will probably outperform oil on the commodities market.

“I think the beans will be more solid than any of the market,” Maguire said. “People need to recalibrate their expectations for the corn market,” he added, explaining he thinks farmers have seen the highest prices already “for some time.”

Scoville agreed that corn might be able to get back up around the $5 range as the United States goes into spring planting. He said the lowest he would expect it to go is $3.50-$3.75.

As for soybeans and wheat, he believes farmers are seeing the bottom of the price range now, and that beans could get back up around $11.50, while wheat will likely “bump around” its current range for a while.

Despite this, Maguire sees the potential for farmers to lock in some good wheat prices for 2009, and expects the wheat/soybean combination will be attractive because both are less expensive to grow than corn and wheat is easier to tend.

As for the commodities market, both analysts are hopeful investors will return with long-term interest, if not with as much vigor as early in 2008. Maguire said in a shaky stock market, diversification is encouraged and commodities are attractive.

“They’re not going to go away,” Scoville said of commodities investors. “They haven’t in the past” after stock market problems.