Some Midwestern analysts are predicting that U.S. corn carryout could triple this year if trendline yields are realized. Kansas State University has a range of $6.50 down to $4 per bushel, and the USDA is projecting a season-average price of $4.80

“USDA is currently saying we’ll have about 97.5 million acres of corn. On the high side, people are guessing we might add one million acres to that. I hope we’ll see a return to less disappearance and a better crop with improved yields.

“If that happens, I’ve got a 16 to 18 percent carryout, and that jumps you up to 2 to maybe 2.5 billion bushels of corn. Historically, that tells us we’ll see a ‘4’ in front of the corn market, and corn will be relatively cheap.”

The South, says Wheeler, is not geared towards a crop the size it saw last year, or the one it’s expecting this year.

“That’s why farmers are contracting – solely to have a spot in line. Buyers have figured it out, and they’re sitting on the sidelines. I’ve got millions of bushels of corn sold, and I need to sell millions more.

“There is no home for the wheat right now. We have record amounts contracted, but we probably have an all-time low that is actually sold. The flour mills have an excess from last year, and they’re not interested in contracting anything.”

From a price perspective, unless there’s a recurrence of drought, it’s going to be hard to put $6.50 back on a new-crop corn price for a September delivery, says Wheeler.

“We could very easily see a ‘4’ in front of this crop. We’ve got a lot of pent-up demand, and we’re seeing a lot of interest from overseas in our exports.

“We can turn our exports back on rather rapidly. We think the USDA is over-estimating South America’s crop, and if that’s the case, China will start paying more attention to us.”

It’s going to be feast or famine this year on carryout, he says. “Either we’re going to set an all-time low, or we’re going to go back to where we’re very comfortable, and it all depends on Mother Nature.”

phollis@farmpress.com

 

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