By Jon Scheve, Superior Feed Ingredients, LLC
The corn market is facing a lot of bearish news right now:
- Coronavirus
- Remaining concerns of African Swine Fever, and a little bird flu
- Corn movement as farmers need to generate some income
- Potentially 94 million corn acres being planted this year
- Lack of China purchases from a phase 1 trade deal
- A potentially large South American corn crop
- Weak ethanol margins
- A strong dollar which leads to a slower export pace.
Despite so much negative news, the market continues to perform well with corn futures only down 15 cents since the coronavirus hit. Spreads between March and May futures have narrowed from around 8 cents last month to just under 4 cents. Considering the carryout size reported by the USDA, this seems overly tight. These tight spreads combined with the strong basis levels could indicate that corn futures may have more upside than downside potential going forward.? Continue reading
