View from the Cab: Hopeful for corn

By Kent Casson

There are hopeful signs for corn prices but it is difficult to say the same for soybeans.

Following a selloff during Thanksgiving week, we saw some stability in the corn market with good demand trends. Ethanol production is reaching record levels as we enter the second quarter of the crop year.

“Some believe the USDA may bump up their ethanol projection in next week’s Supply & Demand report,” Brian Basting of Advance Trading told me recently.

Corn is also looking at a very strong export trend and the U.S. is basically the cheapest source of corn in the world at the moment.

“We are seeing some stellar export numbers even though China is not buying U.S. corn this year,” adds Basting.

Sales to other destinations around the world are at record highs – in fact the sales are 34 percent higher than last year, according to Basting.

Looking at the next six months, we will be the dominant supplier of corn to the world.

While demand looks good for corn, it is a different story for soybeans. The U.S. soybean crop was pretty strong this year.

“The market is now concerned about the prospect of a record crop in Brazil,” explained Basting.

Weather is not a factor in South America, as far as adverse conditions, at the moment. Dry conditions there delayed planting but they have received timely rains since.

“There are very few serious dry spots.”

Carryout will be higher than last year for soybeans. Couple that with an uncertain future on trade policy with the new U.S. presidential administration and there is plenty of uncertainty for the market to take in.

At least if soybean prices tank, hopefully corn will hang in there for a while but it is anyone’s guess at this point.

Farmers are busy making decisions for the next growing season as they book inputs like seed and chemicals and attend farm meetings to learn in the latest in ag policy, technology and marketing.

I had a great time at the Greater Peoria Farm Show last week. It was good to see so many familiar faces in the crowd. Now it is on to the Gordyville farm show in late January where the weather will probably be even colder.