While some other commodity markets are “in the news” lately, corn seems to have slipped into the background.

“Corn has just kind of been the forgotten son at the moment,” said Luke Swenson, president of The Money Farm, West Fargo, N.D., on Aug. 4, adding there is some news with the corn market even though it’s not getting the same kind of attention.

“We’re looking at big stocks even as we get fuel demand and usage back into relatively stable terms,” he said. “We’re still down about 8-10 percent versus last year on crush for ethanol, but we’re getting fuel demand back up and it rebounded heavily off our wild March and April levels. But, coming out of that, getting that last 10 percent back to get us back to full crush capacity is going to be hard. I think it’s going to take some time to get there.”

Swenson noted that demand for ethanol has jumped recently with 96 million bushels (MB) crushed the week before.

“We slightly picked stocks up a little on that and so we’re starting to find the point of balance that we’re at. We’re still at the tightest stocks levels we’ve been at in a few years,” he said. “The questions is, is once we push back over 100-105 MB in the next couple weeks, does demand continue to grow on scale with that?”

He also noted that U.S. travel should be starting to slow down as people are getting back into “whatever our school life looks like this fall.”

“We’re going to need some demand picking up from overseas for us to be strong, as well, and that’s been a little slower just due to the whole structure of the country and the world at the moment,” he said.

“I think it’s going to be coming back, but we haven’t seen heavy buying that we’d like to in order to keep this market running at full capacity yet. If we jump back into full capacity, I think you’ll see ending stocks are right back to peak levels. It will be quick,” he added. “And we don’t want to see that either, so everyone’s being a little bit cautious about how hard they’re pushing to get everything running right now.”

That being said, marginal profit margins on this are relatively decent at the moment, so there is incentive for producers to keep growing, according to Swenson, adding that producers are not talking about shutting back down.

“I mean you’re sitting down here at $3.10 for spot corn and there’s not a lot of scarcity when you’ve got $45 crude and other prices are holding up decent for them,” he said. “I think they’re going to keep grinding, but pushing to get that last 10 MB online is going to be hard unless the market really incentivizes and that’s going to take some overseas demand in my opinion.”

Looking at crop conditions, Swenson noted there are some concerns in areas of the Corn Belt, including in Ohio, which reported some bad pollination information on early-corn and that pictures “look a little sketchy.” Also, Indiana had some heat early on, but that should be going away on the drought monitor with the way they report. It’s just going to take longer than most. And there are a few counties in the western Iowa area that are dry.

“But the thing is the problem areas for the most part are very small. We think the crop potential for corn is still pretty solid,” he said.

Looking at corn prices, the market was testing lows and were at $3.23 on Aug. 4. The low from mid-June was $3.22.

“We break below that and that’s kind of our last technical support area for a long time and they can put some more pressure on this thing into harvest,” he said. “I don’t think we need to be down at $2.80 or anything, but the thing is when you don’t have farmers really wanting to sell, you don’t have a lot of movement in the export market. Everything is just kind of quiet. In a thinner market it doesn’t take much to actually get this market pushed down because there’s not a lot of participants to play on the flip side and buy it back up.

“I think that’s something people are getting a little prepared for,” he continued. “We’re still willing to keep our floors on and let those continue to work just in case that crazy pull-back happens.

“That being said, I think we’re on the lower end of a range that I’m thinking of a reason to escape from. I think in the front-month corn the $3.10-$3.30 is pretty stagnant and I think if you had to pick a side one way or the other right now, I think there’s more risk breaking in the downside than the upside,” he added.

Looking at local prices, at one local elevator in west central Minnesota regularly followed in this column, as of Aug. 4, the August cash price for corn was $2.58 and basis was -50 cents under. October 2020 futures price was listed at $3.20 and basis was -8 cents under.

“I think the market is looking at the fact we don’t have a production issue, we’ve got a demand issue at the moment,” he said. “We need to find more demand because we’re producing plenty and I think that’s the storyline that’s going to stay in the market in the near-term.

“I personally don’t think corn has a reason to go anywhere. I think it’s going to take a lot of big news to actually get us pumped up to do something to the upside,” he concluded.