Although the corn market is not as dependent on exports to be successful as the soybeans industry is, U.S corn exports have been slower than typical. Despite that, the corn market has held steady due to robust domestic demand.
Export demand does not matter
According to Betsy Jensen, Northland Farm Business Management and a producer/marketer from Stephen, Minn, “When we look at (corn) grain inspected for exports, we are down almost 50 percent from a year ago. We are not inspecting a lot of grain, it’s not leaving our shores, and yet the corn market is staying strong, which indicates good domestic demand.”
She also added that corn is only a little reliant on export sales, unlike soybeans which are completely dependent on those. In reality, decreasing corn exports seemed to not really affect the commodity markets.
Impacts of Russia – Ukraine war
Despite this, Jensen does predict an improvement in export demand, particularly in light of the current situation in Ukraine and the ongoing war with Russia. Additionally, it looks that tensions between the two nations are escalating, making the deal between Russia and Ukraine to permit Ukraine to move grain out of Black Sea ports very uncertain.
“Ukraine just came out this week that they are significantly down when it comes to their marketing year, as well. They are just not able to ship out their corn, and they are a big corn exporter,” she said.
When countries search for other corn sources, the U.S. may benefit if Ukraine is unable to move its products out of the Black Sea. It would be headed in the right direction even if those sales are not really high.
Global harvesting and pricing highlights
In other related news, the market is still keeping an eye on the South American soybean and corn harvest, which is currently in progress. Argentina’s corn output projection has been reduced due to the continued dryness of the environment, which is more severe than in Brazil.
She reminded again that corn does not rely on export revenue and the U.S. still has good domestic demand. They use corn as feed food and to produce ethanol as well. Jensen observed that local prices are still doing great and that the base for corn is “hanging in there” when looking at market pricing.
“We still have cash corn a little over $6.50 a bushel. If you look at the corn market, the basis is stronger going out farther. The market is a little inverted and basis is making up for that,” she explained.
Before that, Jensen said, “There is some incentive to keep corn in the bin. If it’s already in the bin, maybe you want to sell it for a spring delivery and try to capture that little increase in price.”
“We are looking at the April prices, which are 12 cents higher than today’s prices. I’ve got $6.54 today and $6.66 for April. So if your crop is already in the bin, maybe you want to price that for an April delivery before you can get in the field, or you want to be setting your price target for an April delivery,” she concluded.
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