It’s been a slow time in terms of demand for corn and that’s had a less than positive impact on prices.
“Corn prices are not all that great. What we’ve seen here, as far as the market, is that our demand has slowed down a little and that’s put some pressure on our old crop with our exports slowing down, and with Brazil being kind of being the main focus,” said Randy Martinson, president of Martinson Ag Risk Management, Fargo, N.D. “It hasn’t helped either that China is now seeing rain that’s lowering the quality of their wheat crop to a feed quality, which will likely displace some corn that would normally be imported into China for feed. That’s also one of the issues that the market is dealing with.”
Another factor the market is keeping watch over is that producers are also seeing good growing conditions for the most part, according to Martinson, noting that the crop got planted at a pretty good pace. But it’s not all good news in that department.
“Now, after seeing (the June 5) crop condition ratings report (from USDA), we know that the eastern Corn Belt is struggling. The drought has grabbed them and has lowered the quality and the crop conditions quite a bit,” he said.
The report indicated that Illinois’ corn crop condition rating dropped 19 percent, while Indiana and Wisconsin were both down 10 percent.
“We’ve had some pretty big drops as far as the crop ratings are concerned, and that tells us that the drought has kind of hurt our potential for record yields this year,” he said. “That’s something that the market has to watch – do we have the capacity to get trendline yields or record yields out of this year’s production with the troubles that we’re seeing right now.”
Martinson said the market will also have to sort out how much prevent plant acres there will be and where there are some lower acres.
“I’m still in the mindset that we’re likely going to see 500,000 fewer planted corn acres because of the late spring up in the Northern Plains, even though we saw good planting progress through the Corn Belt,” he said. “Up here, we did see a little delay (to the start of spring planting) and I think it did pull back our acres.
“Now we’re also going to likely deal with the potential of lower yields, which means our production numbers are going to start to decline once we get into that July/August report,” he continued. “I think that could help support the market a little bit, but for the most part, I think we’ve probably seen the lows with corn. Right now, the market has to sort out with some of the news that’s coming in and get verification.”
Source: agupdate.com
Photo Credit: GettyImages-vladans
Categories: Illinois, Crops, Corn