I am ready to plant corn and per usual, as soon as I press the auto steer button things will become a lot more relaxing. I’ve said it many times before preparing for spring planting and or fall harvest is much worse than actually doing it.  There is an endless number of things to prepare for hoping that when you hit the ground running that everything will go efficiently. I’ve been at this a very long time, and it seemingly never changes.

Of course, modern technology does change things too some extent. For instance, we have GPS guidance that helps us through our fields with pinpoint precision. There are those fertility prescription maps and a whole host of other things that back in the day we never used to have. In fact, your loyal scribe planted lots of corn on an open station tractor. I’m still shivering from how cold that was many years ago.

Planting and producing corn efficiently are one thing in trying to capture marketing opportunities in our corn market is another. It is particularly more challenging for eastern Canadian farmers as we constantly have to balance foreign exchange fluctuations with corn futures prices.  There is also the oligopolistic competition within our eastern Canadian corn market which inherently tends to keep the price under control. The low Canadian dollar of the past couple of years has softened that reality for many Ontario and Quebec corn producers.

The corn futures market was down today, in fact it’s been down quite a bit lately. However, we’re dealing with two distinct markets now, the old crop market continues to hold on with losses mitigated by the relative scarcity of old crop corn across the greater American corn belt.  For instance, old crop corn prices are down about $0.20/bu from their highs last January.  However, new crop corn measured by December 23 corn futures is down about $0.63 from the first of the year. In other words, on a high producing Ontario and Quebec farm corn revenue is going to be down approximately $126 an acre vs what you could have contracted on January 1st.

That’s a tall drink of water for eastern Canadian corn producers as they go to the fields next week.  Still, new crop Ontario cash corn prices are in the $6.73 range as of this writing which historically speaking is off the chart, but not as much as some people have become accustomed to over the last couple of years.  However, at the same time, it’s $0.50 lower a bushel then could be contracted for cash in early February.

You got to remember that this is not the wheat market, which is maddening and almost irrational with lower stocks almost everywhere, but prices continue in the doldrums.  In the corn market prices are reacting to last year’s crop on the old crop side, but all the potential this year on the new crop side. For instance, we know that the USDA report said we have 92 million acres of corn this year.  We have corn ending stocks expected to come in at 1.342 billion bushels. Then of course we have the Safrinha corn crop down in Brazil which at this point has had good weather and holds record potential.

So, mark the date June 18th on your calendar. In fact, put it on your smartphone and set a loud alert.  Why you say?  Simply put, keep in mind the simple concept of seasonality.  It tells us when futures prices usually peak and when they bottom out. For corn, most of the time corn prices top out in mid-June and bottom out in early October.  That happens most of the time but not all the time. Needless to say, what it does mean is that there’s likely still a spring rally in corn futures about to take place based on historical seasonality in the corn market.

Is that a moving target?  You bet it is especially at a time when Ontario corn might not be priced low enough to be exported out to the open seas. Keep in mind as I’ve told you many times once a commodity reaches the open seas the most common denominator is the word “cheap”.  A commodity is a commodity is the commodity, indistinguishable from each other and a cheap price is what brings it all together.  For the Ontario and Quebec farmer it might mean that you want to price your grain defensively, but on the other hand there is all that risk looking forward with the vagaries of spring and summer weather.

That is something that we don’t know. We also don’t know if the Brazil Safrinha corn crop will get into record territory or endure some other crop malady that brings Brazilian corn production down. We don’t know if 2023 will be 2012 again or 1988, when devastating drought redefined corn prices. That’s always a wild card especially as we prepare to hit the ground running.

Some of these market factors are the same as they used to be and some of them aren’t. Keep in mind our 2023 corn market reality is so different than it used to be. Back when I was driving the open station tractor planting corn there was no ethanol market.   Now, that market represents 5.250 billion bushels in the United States, which represents 38% of the total 2023 projected corn production. Then, there is all the other things in our production fields that make us so much more efficient and so much more productive and of course more profitable.

My first few hours of planting corn usually mean digging in the soil, trying to find seeds and determining whether it’s too deep or too shallow. Then there’s all the other adjustments. Keep in mind that the current narrative about the 2023 corn market is what it is. However, it’s not unusual that by the time that corn is harvested this coming November that narrative might be rewritten several times. This is normal. There might even be another Black Swan.  Having those standing pricing orders ready. Good luck in capturing those corn market opportunities.