Cash bids for corn in Manitoba are on their way to reaching new highs, as drought in the U.S. Midwest is causing investors to worry that global corn supplies are going to be the tightest they’ve ever been, an industry official said.
Ron Gendzelevich, president of Quarry Seed at Stonewall, Man., said cash bids in the province rose about 25 cents on the morning of July 19, to put prices "well over" $7.50 per bushel.
Gendzelevich thinks Manitoba corn cash bids have yet to reach their highs, though he isn’t sure where prices will find resistance.
"If you look at the dynamics now, it has the potential to go higher," he said. "We’ve got a world population that wants to eat more than ever before, supplies are probably at their tightest ever and there’s major crop failure in the U.S. Midwest," he said.
U.S. corn crops may be deteriorating right now, but Manitoba corn is looking very good. Record heat waves in the province have helped the crop develop quickly and it will probably produce a record yield this year, Gendzelevich said.
Producers in Manitoba are also making sure they maximize their yield potential because prices have been so good, and they want to take advantage of them, he said.
"The farming community has been paying more attention to their corn crops," he said. "Producers have been upgrading their planters, and those types of things."
Though Gendzelevich expects Manitoba will see a record crop size this year, he said there are some factors that could cause the yield potential to drop off dramatically.
"We need to get a rain in the next two weeks because corn is a very high consumer of moisture at this time of the year," he said. "Corn is at the critical stage where it’s starting to silk and tassel and it needs moisture to get the job done."
Gendzelevich said early frost is also a risk but because corn is developing ahead of its normal pace, it’s improbable that the crop will be affected. Corn normally matures in the first two weeks of September, but will most likely mature in late August in Manitoba this year, he said.
–Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.