Looking back on the corn market action for some perspective, and it has been a remarkable bullish ride. Since to August 12, 2020 the current nearby corn contract (ZCH21) has appreciated more than $2.00/bushel. Supply and demand has become out of balance with supply issues in the US and increased demand coming from mainly China. This has brought opportunities to market the 2020 crop at levels we have not seen in quite some time. From analyzing Farmers Coop’s grain positions, we know that much of the 2020 crop has already been marketed by the producer.
With much of the 2020 corn crop in the review mirror the focus should be on the 2021 crop. When looking forward to the future we need to understand the difference between the futures months and what that means in relations to when a crop is delivered.
While the 2020 crop has appreciated more than a $2.00/bu since August 12, 2020 the Dec’21 (ZCZ21) has appreciated less than half of that, $0.97/bu. This reflects the markets demand for corn now and discounts corn in the future with anticipation that supply and demand will become more in balance.
We encourage looking at your breakeven and make sound marketing decisions that work for your operation. This chart below illustrates the new crop corn contract Dec’21 (ZCZ21) as the blue line. The green line is the 5 year average. As you can see the market is well above the 5 year average