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Demand is the Key to Raise Corn Prices

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Demand is the Key to Raise Corn Prices

Bob Utterback
Bob Utterback

With corn prices expected to stay under $4 for much of 2016, building demand is the hope for a recovery. Corn prices started the week higher after last week’s sharp selloff, but Bob Utterback, with Utterback Marketing, says the rally will not last long, “It will only last a few days and will only be good for about a 10 cent jump in corn prices.”

Chris Novak
Chris Novak

Longer term the hope for a recovery in corn prices lays with building demand, says Chris Novak, with the National Corn Growers Association, “The ways we are going to do that is with the Trans Pacific Partnership and with increased production of ethanol.” Novak said the new trade agreement will lead to more corn exports and will also increase sales of US livestock products which will increase the demand for corn here at home. He added the Obama administration can help increase the demand for corn by allowing the EPA to approve higher levels of ethanol to be  blended into gasoline.

Novak says the next 12 months will be a struggle for many corn growers and action is needed to stimulate demand in order to bring financial recovery to corn producers, “There is more financial stress on farms today and more operating loans that are being  stretched out. That is the heart of our concern.” Utterback said, without a weather event in South America or an increase in demand for US corn, prices will continue to trend lower well into the planting season of 2016.

Novak told HAT action in Washington on both the RFS and TPP could go a long way toward creating that much needed demand, “We need action from this administration to address the needs of farmers and rural America.” He said NCGA has sent a letter to the White House strongly urging action on the RFS to stimulate ethanol demand.



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