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“Fair value” of corn north of $5, analyst says

A market analyst says the “fair value” of corn is $5 dollars and higher.

Jeff Peterson with Heartland Farm Partners says the market is adjusting to last month’s reduction in USDA crop production estimates.

“What the market’s been trying to do is trying to get caught up to really fair value. What we look at is we look at the ending stocks number and we then will look at what the total demand number is from the WASDE report, and when you do that you get a 10.2 percent stocks-to-use ratio.”

He tells Brownfield the fair value for that ratio on March corn futures should be around $5.05 to $5.15.

“So if you really look at it, the corn market is just trying to get caught up to really what fair value is.”

But he says there is resistance.

“Even though I say that ultimately opens up the possibility from the fair market side, boy you sure have to talk about the tariffs.”

Peterson calls that headline risk.