Grain prices have been low for so long, but now the trend has turned.

The biofuel industry is providing massive demand increases for grain. Money is flowing into commodities from index and commodity funds like never before, causing large fluctuations in prices. Trade volumes at the Chicago Board of Trade are huge with more and more of it coming from electronic trading. Local buyers are getting fewer and farther between.

Despite higher commodity prices, input costs are elevated to the point that you MUST market well. From now into the new year, price will determine planted acres for next spring. Hold onto your hat, this marketing year could be a wild ride!

The September USDA crop production report indicated a 13.308 billion bushel corn crop, which is the largest the U.S. has ever seen. World carryover projections are also up. But the demand side of the equation is equally impressive. Meat industry projections are for increasing production over the next 12 months, even with cow inventory down. Several new ethanol plants are expected to come online in the next few months, including the FUEL plant in Camilla. Exports are up and should continue to grow due to our weak dollar in international markets.

In Georgia, we harvested 480,000 acres of corn with a projected average yield of 120 bushels per acre. Even with better yields than last year’s 112 bushels per acre and more than double last year’s 225,000 harvested acres, Georgia is a corn deficit state. There will be occasions to sell your corn at great prices. Basis will improve over the harvest lows and with demand, so strong prices also have a great chance to improve.

The soybean market is completely different this year. Planted acres are down 15% nationwide. USDA has projected production at 2.619 billion bushels. In 2006 there were 3.188 billion. There is a 555 million bushel carryover to use up, but carryover for this time next year is projected to be only 215 million bushels. This market will try to find a way to buy back at least 3 million acres of soybeans for the 2008 crop year. Georgia will harvest 205,000 acres this year compared to only 140,000 last year and average yield is up 4 bushels to 29 bushels per acre. Watch this market closely! Basis could widen quickly and take away the advantage of the higher board price.

Wheat has been the queen of the grain markets. Old crop wheat has tried to set a new record every day. World supplies are at 30 year lows and several major growing areas around the world have reported growing problems. For example, Canada is reporting a decline of 29% in stocks from last year and Australia is now very dry on top of having a small crop last year. Even with really high prices, wheat export sales are nearly double what they were this time last year. This market is screaming for reduced feed usage of wheat. Planting intentions are expected to be up in the face of record high prices. A dramatic turn in prices can occur. New crop wheat can be forward priced now to take advantage of this market.

Your GFB Commodity/Marketing Department is dedicated to helping you with your grain marketing needs. Our staff is experienced and dedicated to serving you. Marketing opportunities can come and go quickly, so stay in touch to take advantage of offers that will maximize the return to your bottom line.

For marketing information call the Georgia Farm Bureau Commodities/Marketing Department at 1-800-342-1196.

By: Joe McManus, is Asst. Director of the GFB Commodities/Marketing Department.