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There’s no doubt that this year’s U.S. corn crop will be big. Will it be as big as USDA’s August prediction of 15.2 billion bushels?
“There’s no doubt that this is a 180-plus crop. There’s just, you look around the country, drive to the countryside, for sure,” says Stephen Nicholson, the global sector strategist for grain and oilseeds with Rabobank.
He says he’ll be watching for information from a couple of specific areas.
“I think the one thing I am going to be watching from USDA down the road is what they do with Northern Iowa and Southern Minnesota. North of Highway 20, south of I- 90. There are a lot of holes in that cornfield, and the farmers will tell you it was a difficult spring. So, I would think the yields potentially could come down a little bit from USDA’s August yields.”
Given that the December corn contract has been hovering near or below $4.00 per bushel, is there enough demand this fall to eventually move the corn price higher?
“I think yes, I’m going to say that the low prices are going to feel on demand. The challenge, of course, is not necessarily demand in the world, but the relationship with China, and that’s really what the problem is. And the other issue, of course, is ethanol. Is there a growth in ethanol? Likely not. Is it going to go away? No, but it’s still going to be there. So, I think we have to worry about demand for corn, and I will say, long term, for sure.
Nicholson added that ethanol for use as sustainable aviation fuel would help provide additional growth for U.S. corn demand.
USDA will release it’s next projections on the 2024 U.S. corn crop on Thursday, Sept. 12.
Source: NAFB News Service