Rain is slowing harvest, but significant crop losses aren’t likely for corn, said Arlan Suderman, chief commodities economist for the INTL FCStone Financial FCM Division. Ears that have drooped should shed the moisture, and the recent weather system was expected to move out late this week.
“Soybeans are a bigger concern,” he said, because the weather can lead to pod splitting and quality problems. “But the market is not concerned because we have such big crops” maturing early.
Mexico’s growing swine industry offers one bright spot for corn export demand, Suderman said. Mexico’s per capita pork demand is gaining 5 percent annually, but its feed ingredient production is lagging.
Long-term prospects for corn and soybean exports to Mexico may be positive, but the relatively short-term outlook for breaking the U.S.-China trade war seems bleak.
Suderman expects no change in the tariff battle until after U.S. midterm elections at best, and “this may be a long-haul type of a battle” about China’s desire for economic and military superiority.
If the China battle is extended, “the market’s job will be to reduce soybean acres and encourage corn,” Suderman said.
With spring wheat futures above $6/bu., Brazilian soybean acreage trending higher, and current soybean cash prices in some areas near $7, farmers in the Dakotas and northwest Minnesota could swing acres from soybeans to wheat, said Joe Lardy, research manager for CHS Hedging.
Lardy said he’s hearing many farmers will sell corn and store beans this fall.
“If they do, they have to play the carry,” he said.
Some growers are looking at option strategies to establish a price floor.
“If you’re going to store them, get paid to store them,” Lardy said.