By Jon Scheve, Superior Feed Ingredients, LLC
The corn market shook off bearish news and closed nearly 10 cents higher last week.
Basis values in the west have been very strong, which is pulling corn from the middle of the U.S. to the southwest. This increased corn demand seems to be causing the December to March futures spread to narrow into a very small carry, which is incentivizing commercial elevators to let go of their stored corn as soon as possible.
Since U.S. farmers are generally not selling, the market is begging for grain right now. However, with reduced supply in the southwestern corn belt and a tight carryout overall, some farmers think corn futures will follow the pattern of the last two years and trade above $7.50 by spring.
As always, the corn market is complex and there are many factors impacting prices right now. The following summarizes both sides.
Reasons corn could rally to $7.50
- Argentina’s yields were devastated by La Niña the past two years, and there is reason to believe it will happen again this year with the weather phenomenon expected to last throughout most of the growing year. There