Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu
The corn market has been bullish for the past two years. History tells us that corn bullish markets typically last in two-year cycles prior to peaking. The bull market that occurred in 2010 peaked in 2012 and the bull market that started in 2006 peaked in 2008. This bull market has many similarities with both of the past two bull markets.
The last major increase in corn prices in this market was directly attributed to concerns related to Ukrainian production. There were rampant concerns that producers there were going to be incapable of producing a crop due to the war. What has happened there has been far from what was expected. Ukraine’s ag ministry reported that 89% of the expected area for spring grains had been planted by May 26th, which includes 10.88 million acres of corn. Barring any changes to what happens in Ukraine, there will not be an expected shortage of corn from there this year as anticipated, especially when coupled with a large carryover from last season. It is still to be determined how Ukrainian grain will leave the country, but we are far way away from that right now.
Bullish markets need bullish news to continue and that may only be weather related issues occurring at this point. All bets are on the weather and there are currently no expected droughts for the Midwest. Remember the golden rule of grain marketing when watching the market — Producers don’t sell grains because they think it’s going down; they sell because they believe it is finished increasing.