Corn is drawing the most attention from grain market watchers as global supplies tighten and demand remains strong. Mike Zuzolo, founder of Global Commodity Analytics, says the fundamentals behind corn are the strongest they’ve been in years..
“We’re now tight in U.S. ending stocks. Like I said, we’re the tightest we’ve been in stocks to use with the world going all the way back to the 2012 drought. France has a 2012 drought situation. Ukraine has dry weather. So, we have both tight U.S. and world stocks, and then we have very strong biofuel demand, and I don’t think South America is going to produce as much as what we’ve expected these last few years. So about by every metric, you throw fertilizer, diesel prices, things like that into it, by about every metric, corn is probably the better crop to store this year once again.”
Those supply concerns have fueled discussions about whether corn prices can move significantly higher in the months ahead.
“My mindset is that world stocks are going to become more and more important, and if Ukraine remains dry, then the next stopping point could be around $5.35 to $5.50 for December corn. At that price, you’re going to need, I think, the beans and especially the wheat market to play a role in supporting you to go higher, but I think the biggest thing I’m going to watch: does Paris corn, the European market, which has been a good canary in the coal mine, does it remain at around $8 here the next 30-40 days? I have gotten a pretty strong sense this last week from my clients that they have sold maybe too much of their old crop corn, and they’re essentially done with old crop sales. They don’t have much more in the bin. That’s something to really watch for along with that European price.”
As harvest approaches, Zuzolo says marketing decisions may be just as important as production numbers.
“My mindset is that we’re going to have a much tighter cash supply globally, in corn especially, and you might want to look at more paper positions to cover yourself, especially for what you can store past the harvest time period, especially if we get March or July 2027 corn futures to that $5.50, $5.75 level. Store it, protect the future side of the equation, and expect maybe the funds to do most of the selling whereas the cash market stays pretty strong.”
Zuzolo says tight global stocks, weather concerns in key growing regions, and resilient demand will be the major factors influencing corn prices as producers move into harvest.