The story surrounding corn prices hasn’t changed the past few years. Farmers have been facing with stagnant corn prices for nearly five years now, something that may not change this spring.
“It helps us from a feed perspective in talking about corn prices that don’t move very much from where we’ve been,” said Scott Brown, University of Missouri economist. “At this point, we’re really going to look at what happens to the crop once we get it in the ground here in the United States before I think we’ll see a lot of movement in corn prices.”
USDA recently threw out a corn acreage forecast number above many analysts’ expectations. The acreage numbers - in addition to adding 300 million bushels to the corn carryout number - was a double dose of news that was hard for the market to stomach.
Brown thinks the 92.8 million acres of corn currently being estimated by USDA will be hard to achieve this year, especially with flooding and planting concerns. However, Brown thinks that factor alone won’t be enough to move the markets much.
A muted market is something to watch, as a price spike could happen when you least expect it, according to Don Close of Rabo AgriFinance.
“When markets really catch us by surprise is when nobody is looking,” Close said. “I’m aware of the stocks, we all know the increase in acreage, but I just want to be a little bit cautious for whatever reason if that market starts to move, be prepared to take advantage of it.”
If prices move higher heading into the summer months, Brown encourages producers to take action and set realistic expectations for prices.
“If we get any kind of market run-up in corn as we go through the summer, it may be a chance to lock in some better prices,” Brown said. “Producers should not plan on $8 corn anytime soon given what we see today.”