Big yields, big carryouts and little volatility. It’s a corn market story that’s been with us for two years and may persist throughout 2018.
In this edition of RealAgriculture Corn School, Grain Perspectives market consultant Matthew Pot takes a look at what growers can expect from the corn market in 2018. “With huge U.S. supplies, volatility is going to be low and whenever we get a chance to take profit – on spikes on basis or good premiums – we should take advantage of that,” says Pot who spoke to growers attending an Innovative Farmers Association of Ontario workshop earlier this week.
He notes that the surprising Ontario crop, pegged at about 168 bu/ac, means there will be sufficient supplies in Ontario and “no real potential in the basis for this year.” In the interview Pot also discusses the potential impact of the Ontario government’s intention to double its ethanol mandate for gasoline from five percent to 10 percent by 2020. He says markets don’t immediately respond to ethanol expansion pronouncements, but when that demand arrives, it will strengthen the markets.
Pot notes that the 2018 market will likely see a historic shift as soybeans continue to rival corn for acres. The latest USDA report estimates both the corn and soybean crops at 91 million acres and many analysts believe soybean will forge to the lead as planting approaches. Overall, Pot says the market will continue to look for ways to digest oversupply and sellers are likely stuck in a sideways market in 2018 until we see some kind of supply concern.
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