While many producers have pulled back on corn harvest in order to move forward on soybean harvest, the corn market too has seen a bit of a pullback.

“We’ve seen a pullback in the corn market as of late,” said Randy Martinson, Martinson Ag Risk Management, Fargo, N.D., on Sept. 29. “Corn has been a little more sluggish of a market. It’s been trying to rally, but it hasn’t had tremendous strength. It did hit some pretty good levels a couple weeks ago when all the markets were trading with some fairly good strength. Corn was still just a little lackluster, but we were still putting in that level we haven’t seen since pre-COVID in the March timeframe. Everybody was feeling a little bit satisfied with the run.”

Looking at demand, Martinson said it hasn’t been as strong in corn like it has been in soybeans. While soybean sales “have been going great guns,” corn sales have been steadier. But, with that said, corn sales are still running very good compared to last year at this time.

“We’re only a month into the marketing year and we’ve already sold somewhere in the area of 36 percent of USDA’s expectations, so it has been strong,” Martinson said. “But we don’t think that production or the yields have been hit as bad with the frost and with the dry conditions, so that is the part that’s kind of keeping the corn market a little at bay and not seeing as much strength.”

Overall, Martinson feels corn may see a little cut in production in the next few reports from USDA, but its ability to use that as an impetus to increase sales won’t be as great as it will be with soybeans. “Still, it’s got a chance to see a little bit of a push if China continues to buy aggressively and that’s the one caveat that we’re not quite sure of,” he said.

At this time, China is only estimating that it’s only importing 7 million metric tons (MMT) of corn for the 2020 calendar year. China has already bought somewhere in the area of 9-10 MMT from the U.S., and a couple from the Ukraine, so the U.S. knows they’re going to be bringing in more than what they’ve been signaling.

Martinson pointed out there are rumors, because of some of the typhoons and the increase in production with the livestock in China, that China is going to have to import closer to 30 MMT.

“However, their price has been running very strong in-country because of inflation and tight supplies,” he said. “It’s now started to drop, so that’s leading some to believe that maybe China won’t be importing as much as was first signaled and that they might be getting enough to get some of their needs met.”

The next big thing to keep an eye on is what’s going to happen in Argentina and Brazil. Brazil is dry, so it’s likely they’re going to slow down their planting of soybeans, which will delay their harvest and in turn will delay their second crop of corn planting. And Argentina continues to be dry, as well, which is going to trim some of their production.

“So it does look like that if exports are going to take place, the U.S. will be the market. It’s just a matter of where the demand is going to be and from who,” he said.

Local prices are running right in that $3.10-$3.30 area depending on where your basis is running. Producers are looking at $3.17 for harvest delivery or $3.20-$3.30 when you get out a little bit further in the calendar.

“It does look like basis tightens a little bit when you get a little bit further out, too, so that’s where a lot of the support comes from,” he said.

At one local elevator in west central Minnesota regularly followed in this column, as of Sept. 29, the August price for corn was $3.16 and basis was -45 cents under. The January 2021 futures price was listed at $3.71 and basis was -4 cents under.

As stated earlier, corn harvest has not been as aggressive as soybeans. Corn harvest is at 15 percent complete, right in line with the five-year average, but it’s about 5 percent less than what the trade was anticipating. As in many places, producers have switched over to combine beans and get them off, figuring the corn could hold if worse comes to worse. At this time the weather forecasts are good. It’s going to be cool, but dry and that should help keep harvest progress going at a good clip for the next couple weeks.

And as producers work at harvest, they also have to consider marketing their product. Martinson said he has recommended selling above a $3.65 level.

“I would continue to look at selling when the market gets above that,” he said. “Basis levels continue to be fairly strong and I think they’re going to remain strong through the winter because we have so little corn planted in the Northern Plains that the end users, the ethanol plants, are going to have to be aggressive to get the corn brought out of the bin. So I think our basis levels will widen here at harvest, but then they’ll tighten back up again as soon as we get past harvest because they’re going to need the product.

“Futures though is going to focus more on what’s going to happen with the crop, more in the Corn Belt and right now it does sound like yields are coming in fairly good,” he added.

On the ethanol side of things, production has been waffling right around that 900,000-950,000 barrels per week.

“It’s been fairly constant in that area since we’ve recovered from the worst of the COVID period, and it looks like it’s probably going to stay right in that area, so it’s going to maybe a little less than anticipated by USDA for the corn usage going in there,” he said. “But if we can get the vaccine done and we can start being a little more comfortable in traveling, I think then we’re going to be looking at an increase that could go over a million barrels a week. I do think we have a chance to build that market up a little but it’s going to take probably into spring before we see that.”