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Corn prices climb before harvest as demand stays strong and yield questions linger

A market analyst says the rally in corn heading into harvest is unusual.  

Matt Bennett is CEO of AgMarket.net.  “That’s as big of a contra-seasonal move as I can remember,” he says. “This is not one that anyone would have predicted.” 

He tells Brownfield there is strong demand for corn at a time when there are concerns about the size of this year’s crop. “There’s a record world in US demand,” he says.  “What that’s done is it’s chewed that carry out down to a level that our carry in for this upcoming marketing year puts us in a spot where we can’t afford yield to get much smaller.” 

The USDA’s August crop production report had corn yield pegged at 180.7 bushels per acre, while a recent crop tour had average yield in the 170s.   

Bennett says he expects adjustments from USDA in its upcoming September report. “It tells me USDA is probably going to have to come down some,” he says. “How much is key. Because their August report showed 10.1 percent stocks use ratio. You get below 10 percent, you typically get a demand rationing rally, which I think we’re already obviously seeing.” 

The USDA’s next set of Supply and Demand numbers are out Friday, September 11 at Noon Eastern/11 am Central.