“The greater focus is on broad global demand, given the downturn in global growth expectations,” BB&T Capital Markets analyst Heather Jones said in a Sept. 22 report.
Van, the CME options broker, said the corn market’s downside is probably limited because adverse weather curbed this year’s harvest prospects, keeping grains supplies tight amid strong demand from the ethanol industry.
In a Sept. 12 report, the U.S. Department of Agriculture cut its estimate for the corn crop by 3.2 percent, to 12.5 billion bushels, and projected average nationwide yields at a six-year low, citing extreme heat over the summer.
“Yields haven’t gotten significantly better,” Van said, referring to the U.S. corn crop. “I don’t see this going (down) much further, because this crop is not that good, unless demand totally disintegrates.”