The fundamentals in the corn market are not friendly to a significant price increase. Jacob Burks, the chief growth officer for Ag Market Dot Net, talked about what’s limiting a potential boost in corn prices.
“The fundamental side of this marketplace really got no help from the acreage report. We talked about 98 million acres last year on the corn side and lower bean numbers. The bean acres going into last year were in an area of being okay, because we’ve had such a big crop coming from South America. This year, we were hoping to see a switch over where we were going to end up growing more. I think the RVOs, all the reasons why we put more crush capacity in the United States are there, and we’ve had some policy changes to increase the need for that. And we were all in hopes that maybe we would see that push of bigger bean acres, and see that corn acre come down from 98 million, even talks of something below 92 or somewhere in there, at one point.”
The high price of fertilizers is also putting a damper on corn prices.
“You talk about the fertilizer, and that becomes a pretty big problem for these guys wanting to go in there and put a larger amount of acres of corn in, and I think that that’s something that, if you didn’t have it locked in, that might have changed your mind a little bit. So, I would say right now, the fundamentals of the corn market are very, very reluctant to let this thing get up any type of big rally without any type of weather problem.”
Even the weather forecast isn’t favorable for pushing corn prices higher.
“We start talking about 95 to 96 million acres of corn going in, you start talking about the western part of the Corn Belt, you might be talking about a little bit of a drought. But across most of the central part of the Corn Belt and into the East, I mean, there’s no weather issue yet. So, I think that, right now, there’s no fear yet of problems. You got a 95-to-96-million-acre number, we’ve proved that we can grow big crops, and I don’t see a lot of problems out there in the corn market.”