Range-bound corn market

By Jon Scheve, Superior Feed Ingredients, LLC

The February USDA report was published, and like usual, it didn’t impact the market much. For the last 18 trading sessions, corn has finished in a tight $4.80 to $5 trading range. What are some variables that could cause the market to move out of that tight range?

Weather

Argentina has been experiencing hot and dry weather with limited precipitation during the critical growth stage of their corn crop. Their yields will likely be lower than normal, but it is uncertain by how much. Current estimates range between 5% and 10%.

Mato Grosso Brazil, where nearly 50% of the second corn crop is raised, is facing the opposite problem with too much rain. This is delaying their planting season, which optimally happens in February. While the planting pace is behind, it isn’t too bad yet. Plus, a late planted crop doesn’t necessarily guarantee a yield reduction.… Continue reading