A slow progressing 2020 corn harvest, and to a lesser extent, some potentially good news about trade with China, are having a limited impact on the corn market.

“It’s kind of two-fold,” said Luke Swenson, president of The Money Farm, West Fargo, N.D. “We’ve never pushed up to a $4 mark on a little bit of optimism from China. Then we see harvest continually pushed about 10-15 percent behind normal, and last night (Oct. 28) we dumped snow across the ‘I states’ (Iowa, Illinois, Indiana) and you’ve still got some there. But outside of that, there’s really been nothing for a headline, and that’s not really going to change in the near-term, in my opinion, because we don’t have any export news changing.

“There’s good news about China, but that’s more focused on livestock, both dead and live, and soybeans. So until corn officially works its way into the rhetoric around there, I don’t see them reacting on that front,” he continued.

“There’s just no news and the bull (market) needs to be fed every day, so we’re honestly expecting it to sit at the bottom end of the range until we get closer to the next USDA report and see some value buying ahead of the report.”

Swenson said it’s a flip of the coin whether or not USDA actually drops yield or reassesses a little bit on the harvested acres and then when the agency actually reassesses the 2018 crop going forward.

“Those should be your big catalyst, but at the moment we don’t really see a need for a big surprise one way or the other,” he said.

Elsewhere within the corn market, Swenson noted that margins have shifted in regard to ethanol production.

“You’re starting to see it come back a little bit, but we’re still historically below where we usually are, and that’s mainly due to focusing on the actual aspect of the supply and demand issue,” he said.

As for local prices, Swenson noted that basis has been positive in every North Dakota plant over the last couple weeks and it’s starting to come up.

“We’ve seen some guys start to move (corn). We had one customer that they were actually combining corn in the 30s (percent moisture), drying it down to 25 (percent) because the ethanol plant would let them bring it in at 25 percent, no shrink, no dry. It was basically the equivalent of them getting $5 cash corn,” he said.

“You’re seeing some of that grind taper off, and those guys are finally sourcing some more grain out of the ‘I’ states, and the grind is starting to tick back up,” he continued. “The big (harvest) delay, I think you saw it affect crush in some places, but it’s going to start working its way back up. It’s just that all these plants that have been idle over the past month going into harvest in the really tight areas, they’re going to wait until the supply is there before they fire back up because it costs a lot of money to turn that thing on and off. You want to make sure the flow is good.”

At one local elevator in west central Minnesota regularly followed in this column, as of Oct. 30, the November cash price for corn was $3.60 and basis was 27 cents under. June 2020 cash price was listed at $3.69 and basis was 39 cents under.

On the trade side, the U.S., Mexico, Canada (USMC) trade agreement has been close to being signed for the last six months, “depending on whose twitter account you follow,” according to Swenson, adding that both Democrats and Republicans are holding it off, fighting over a variety of topics.

“You know how our normal bipartisan stuff works: no one wants to deal with each other and they sit and hold each other hostage on issues. There’s been nothing really new. It’s just being held off and held off as a bargaining chip. But it’s something that needs to be done,” he said.

“Mexico, I believe, ran 800,000 tons of Brazilian corn up in the last two months, which is a record for a while. So it stinks we’re seeing our domestic partners starting to pull from Brazil,” he added. “We need to see this thing get sorted out. I don’t care who your politician is, let’s get the thing moving forward and keep it going.”

As the 2019 corn harvest drags on, many producers are saying they’re going to let their corn sit in the field over the winter because of the overly wet conditions and then combine next spring, hoping it will dry down naturally, at least a little bit. But Swenson is a bit skeptical.

“Everyone says it, but everyone is going to go as hard as they can right until the snow is down,” he said. “When you get freeze up this month, you’re going to see the corn guys start to travel and hopefully start to dry this thing down because things can get pushed off quicker.

“I think you’re going to see a lot more taken off than you expect. There’s definitely going to be a few percent (of acres) that are left behind for next year, but the question is – is that stuff harvestable anyway? That’s the giant unknown and everyone is looking at USDA to try and sort out.”

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