May corn futures closed in on $6 Wednesday, a price move being driven by a number of factors. Brian Doherty with Total Farm Marketing told AgDay’s Clinton Griffiths that the performance by corn is one for the record books.
“You’re looking at tightening inventory and strong base levels in corn of the old crop,” says Doherty. “We’ve had all these robust export sales figures from particularly from China, so that corn is going to basically make its way west. So you’re seeing some real basis pops and some real need for ethanol plants to secure inventory into the May, June, July window. Farmers are taking advantage of that, but supplies are getting tighter.”
Doherty says USDA’s adjustments to the 2020 corn crop aided to the tight supplies story.
“You had this sort of big supply numbers dwindling quickly, increasing export activity, and here we are today with a number of things come together,” he adds. “Just a year ago, we were looking at negative energy prices, and this month, we saw $60 crude oil. So, without being too worried, you’re looking at just a really strong supply driven and demand driven markets presently.”
What is it going to take to push prices even higher? Doherty says that will all come down to weather.
“I don’t think we can point to anything yet in the planting season here, cool and dry the next couple of weeks, that should allow for good planting. But the focus really is on that southern hemisphere second crop with Brazil corn.”
