$10.00 Corn in the Offing?
The all-time high U.S. price for corn happened in August 2012, when it peaked at $8.44/bu., according to Trading Economics.
Corn prices edged ever-so-close to that record in April 2022, with futures hitting $8.30/bu. They’ve retreated since then, but analysts predict the possibility of $10.00/bu. corn in the coming year is not out of the question.
If it happens, $10.00 corn likely will be the result of a perfect storm of soaring demand and the confluence of many supply issues, topped by the war in Ukraine. In recent history, Ukraine has been one of the top-5 corn exporters in the world. But this April, the country shipped roughly one-third less corn, or 923,000 fewer metric tonnes, compared to April 2021.
Ironically, by May 1 in the current planting season, Ukraine had a larger percentage of its traditional corn acres in the ground than most of the U.S. Corn Belt. Planting delays allowed just 15-20% of Midwest corn acres to be planted, compared to about 30% in Ukraine.
Yield predictions for this year’s U.S. crop are tempered by that late planting, coupled with concerns regarding drought in the western Corn Belt. Adding to supply pressure is the Biden Administration’s April announcement that it would allow the sale of higher-percentage-ethanol gasoline over the summer in an attempt to suppress rising fuel costs during peak consumption season.
Trading Economics predicts corn to be trading at $9.06/bu. by the end of Q2, and $10.00/bu. in the next 12 months. Tommy Grisafi with Advance Trading, Inc. recently weighed in with less conviction amidst unprecedented market conditions.
“We could trade down to $5.50,” he told Tyne Morgan on Ag Web. “We could trade up to $9.50.”
It appears the one certainty is that the market will be in for a wild ride in the months ahead. “With what’s happening in the world, we’ve never had this happen,” shared Grisafe. “There’s no one old enough who remembers the last time Russia invaded Ukraine, into having back-to-back problems in South America; drought in North Dakota, Montana, and Canada; and at the same time, phenomenal demand.”
