Market Commentary for 10/11/24
Corn
As I expected, the USDA increased the corn yield this week. Based on conversations I continue to have with producers throughout the US, I still think the yield projection will increase in the November and January reports. I’m anticipating a final yield around 185.
The USDA also raised the corn export potential. If the USDA keeps increasing yields, it’s likely export potential will increase too.
The following chart outlines several different yield/export scenarios and how the carryout and stocks/use percentage would be impacted.
Based on my analysis, it seems likely the corn carryout will be near 1.9 billion. A carryout over 2 billion would likely push values well below $4 for a while. A 1.9 billion carryout probably prevents the market from trading to $3.50 but is probably not low enough to push values back to $4.50. That type of value would require a big export demand increase, most likely from a production issue in Argentina or Brazil over the next 6 months.
Another issue that could impact the corn market is declining basis prices. In many areas harvest isn’t 50% completed, which means logistics haven’t been fully tested yet. In areas that are 70% or more harvested, there has been increased pressure on basis values as well as reduced unloading times at end users.
Historically, in 12 of the last 33 years, or 36% of the time, December corn futures have hit the low for the year in November. It wouldn’t surprise me if December futures push below the low of the year at $3.85 one more time before Thanksgiving.
Want to read more by Jon Scheve?
What Is In Your Marketing Tool Box
Be Cautious When Listening to Anyone’s Opinion on Market Direction
Could The National Yield Be Above 185?
Could The Lows Finally Be In For The Year?
What Crop Should You Store At Harvest?
