Range-bound corn and tariff-impacted sorghum

By Jon Scheve

The corn market doesn’t seem concerned with the possibility of tighter stocks, which may mean there is more supply than the USDA is currently estimating.

One indication of this is that both wheat and sorghum’s basis values in the southwestern corn belt are much lower than usual for this time of year. This is also pulling down corn’s basis value there, which is unusual. Typically, the southwestern corn belt pulls corn to it this time of year, it rarely pushes it away like we are seeing now.

The ample wheat stocks from last harvest are likely causing some of this. Plus, current weather conditions are average to slightly above normal for the next wheat crop compared to the previous 5 seasons. This suggests wheat stocks will likely stay the same or increase slightly in the next marketing year. This could put downward pressure on prices and keep wheat in the feed ration longer at the expense of corn.… Continue reading