Farmer selling of corn reverses
Will last Thursday’s bearish number from USDA on the number of acres of corn to be planted this year affect the rate of farmer selling? The value of that grain producers still hold did go down after the surprise from the government, and Mike Silver of Kokomo Grain said last week there had been an increase in corn movement prior to the report.
“Farmer selling activity for corn did pick up as farmers needed to generate some cash flow, some working capital to meet current expense needs. Now the recovery in the corn market was not as good as it was from a price standpoint for the soybean markets, so we didn’t see as much activity or buying or pricing in corn as we did soybeans, but yes it did pick up in the course of the last 7 days.”
Now with the downturn will farmers interested in selling go back to the waiting game?
“I do think that corn movement will slow up at this point as farmers go to the field and as they question perhaps the integrity of this large corn acreage number and look forward to some prices better than they could price additional bushels today. So yes I think that corn movement will slow and I think that the anticipation on the part of farmers is that we can see some rally off of this new low that we just put in the corn market.”
Friday the corn futures market continued to sell off and dipped below $3.50 for a time. It then rallied to gain a couple of cents on the day. Silver says if the market can finally make its way back to $4.00, activity will definitely pick up.
“If we can ever get to $4 to $4.15 in the corn market, we will buy a lot of corn,” he told HAT. “There will be a lot of corn priced, but it’s going to take some effort and something to change now to get to those levels.”
Ethanol plant bids have been steady to stronger on the slowdown in farmer selling.