Heavy corn supplies and slow exports weigh on old-crop prices

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The big corn Ontario crop of 2023 is doing what analysts suspected it would to cash prices — and it’s not a rosy picture.

Phil Shaw, market analyst and farmer from Dresden, Ont., says that a seasonal post-harvest rally didn’t even happen, which was a little surprising, and Ontario farmers have got plenty of corn still stored until either exports pick up or prices do.

Old-crop corn cash prices are hovering around the $4.70 to $5 per bushel mark, with beans around $15 per bushel, a far cry from where prices were just a year to 18 months ago.

“Maybe our exporters are finding quite a bit of competition on the open ocean. We have preferential treatment, usually, going into the UK and Ireland, for Ontario and Quebec corn… but the bids haven’t been as strong as they once were in past years,” he says.

The Canadian dollar staying in the mid-70s is helpful right now, but Shaw says that currency risk of the dollar going higher is one aspect he’s watching in the months ahead. A higher dollar would drop basis in the province, he says, something no one wants with these already lower prices.

“Both both old-crop and new-crop soybeans and corn have gone up a little bit since the end of February. That might be because non-commercial demand for speculators and others might be covering their shorts (in other words, a small change in market position),” Shaw says, “But things are bearish, you just can’t get to kind of get away with that with the amount of grain we’ve got in the world right now.”

Currently, new-crop corn prices are slightly more attractive than old-crop which is a little odd, says Shaw, but he doesn’t see either the corn or bean price signals being enough to significantly shift planned acres at this time. The Ontario winter wheat crop is in decent shape for the end of March, so unless the planting season turns very wet, he doesn’t think corn acres will fluctuate much from the latest StatsCan predictions.

 

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