Whatever happened to the danger of rot hiding inside the millions of acres of unharvested corn standing in American farmers’ fields all winter?
The answer can be seen in the corn futures market charts: the danger dribbled away until only a puddle remains.
“It’s not an issue,” said Joe Victor of Allendale, Inc., who was surprised that such a large concern evaporated over the winter.
“It was an issue last December. It was an issue in January and February. But when we started to see harvest in Nebraska in mid to late February, what did we see: higher test weight and lower moisture.”
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The result was increasing weakness in the corn market and a drag on the other cereal grains. Concerns about corn rotting held the glutted market higher through winter than it would have been without that hint of danger, Victor said.
Now, with the dregs of the old crop brought in to farmers’ bins, the concern is gone.
“I’m not hearing anything,” Victor said.
Corn is the heavyweight of cereal grains in North America, setting the price base for feed grains, oats and wheat. Analysts say the huge corn supply still in stock is restraining all cereal grain markets. Crop quality is a further bearish factor.
“There’s no shortfall of good yellow corn,” said OatInsight analyst Randy Strychar.
Some micro-markets are having trouble with small components of the corn complex.
In an April news release sent to salespeople, American health food manufacturer Usana warned that it might have to reduce production of a dietary fibre supplement because of corn quality problems.
“Due to an abnormally cool and wet growing season that has caused widespread contamination of corn bran crops, there is a global shortage of this raw ingredient. Manufacturers that depend on this product worldwide are scrambling to find a solution, and Usana is no exception.”
Strychar said he had not heard about widespread problems in the health food or snack bar markets, but thought the concern sounded plausible.
“There are problems with mycotoxins and a slew of not usual problems in the corn crop,” he said.
Those aren’t a big influence on the main corn markets, but may affect some smaller users, he noted.
Victor said farmers have learned how to blend away quality problems.
“Some of these big farmers have bigger facilities than the town elevator,” said Victor.
“They know how to blend it and avoid the discounts.”
That puts more corn into the top quality classes.
