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Corn market supported by Mexican demand, variable U.S. harvest results

A commodities consultant says he’s optimistic about the corn market.

Karl Setzer, a partner with Conus Ag Consulting, says export demand remains high with the closure of the U.S. border to Mexican cattle imports due to concerns about New World Screwworm being an unexpected win.

“We got Mexico, which all of a sudden has a lot of feeder cattle they have to feed, they need to import feed corn because 80% of the Mexican corn crop is white corn for food purposes,” he says.

He tells Brownfield that variable harvest results from across the country are also expected to trim U.S. production expectations.

“We could see this drop down closer to 180, maybe 181 bushels per acre.”  He says, “It would still be a record, but it’s 500 million bushels less than trade is expecting. That would really shake up the balance sheet.”

He says, “With the carry we have in the market and what we’re seeing on basis, the market is telling us to store as much as we can.”

Setzer says the carry should cover storage costs for most producers as they hold out for more profitable pricing opportunities.

AUDIO: Karl Setzer – Consus Ag Consulting