KANSAS CITY — Michael Cordonnier, Ph.D., president of Soybean and Corn Advisor, Inc., in Chicago, told Milling & Baking News that corn prices were likely to move a little lower and hit their bottom in the next six weeks, especially if the U.S. Department of Agriculture increases its corn yield estimate to 173 to 175 bu per acre or higher in its October Crop Production report to be released Oct. 10. In the September report, the U.S.D.A. forecast corn yields at a record 171.7 bu an acre.
Dr. Cordonnier said most bearish news already has been factored into pricing but there was still room for values to soften a bit more. Where that takes December corn futures over the next several weeks was anyone’s guess, although most expected them to be lower than current levels.
Trading at about $3.19½ a bu mid-morning Wednesday, the nearby corn future has fallen 24% so far this year and was near a five-year low. Recently, some experts suggested that technical factors may lead corn to test the $3-a-bu level before the October production estimates are released and move below that level by the end of October, especially if the dollar keeps appreciating, hurting U.S. corn exports.
Dr. Cordonnier avoided making precise price predictions but said he saw little likelihood of any sustained upward price moves until after harvest, when several factors may lead prices to “slowly grind higher” after a period of sideways trading at low levels, which would indicate a bottom had been achieved.
He added that, at some point, the adage “low prices cure low prices” would start to be seen, meaning that corn futures prices may eventually decline enough to attract a surge in export demand, even if the U.S. dollar remained strong.
He predicted corn prices may firm somewhat after harvest on slow farmer selling because of low cash corn prices. Also possibly contributing to post-harvest gains would be reduced corn supplies in South America and prospects for a decrease in U.S. corn acreage as producers seek higher returns with other crops in 2015, he said.
As for the month of October, as the harvest expands northward, Dr. Cordonnier said any localized freeze events in the Upper Midwest corn states where some late planting occurred — such as the Dakotas, Minnesota, Wisconsin, Michigan and Ohio — were not likely to do much harm to this year’s huge crop.
Noting that it takes temperatures at 27 to 28 degrees Fahrenheit for several hours to actually stop plant growth, he said shorter interludes of cold at somewhat higher temperatures would not be of much import to a crop of more than 14 billion bus.“Could a freeze lower yield by two bushels an acre? Not likely,” he said. “Perhaps two-tenths of a bushel.”