Manitoba corn rides strong yields through bearish market

(Allan Dawson file photo)

CNS Canada — Even as large world supplies continue to weigh down the North American corn market, farmers in Manitoba can continue to hang their hats on strong yields, according to an industry expert.

Manitoba’s average yield from the 2017 crop was 134 bushels an acre, according to Myron Krahn, president of the Manitoba Corn Growers Association.

While the number, taken from crop insurance data, is down slightly from the previous year, Krahn said it’s still higher than the 10- to 15-year average.

Solid demand is another factor underpinning the market.

In particular, Alberta feedlots have taken a liking to Manitoba corn this year, as corn is competing more favourably with feed wheat and barley prices.

“Corn prices aren’t fantastic,” he said. “They’re hovering pretty much between $4 and $4.30 (per bushel).”

A major reason can be found in the U.S. Department of Agriculture’s latest supply and demand report. On Friday, the agency pegged the 2017-18 U.S. harvest at 14.6 billion bushels, which was 26 million bushels higher than the December forecast.

USDA also raised the ending stocks number in the U.S. to a staggering 2.48 billion bushels.

As a result, whenever prices start to make a rally, U.S. farmers immediately begin dumping supplies, which keep the gains in check.

As long as bids don’t drop below the $4 level, farmers in the province should continue to plant acres, Krahn said.

However, it’s not looking as though acreage will go up that much, if at all, in 2018.

“Talking to fellow seed dealers around the province there’s a large assumption that corn acres will be fairly flat,” he said.

According to Statistics Canada, Manitoba farmers planted 410,000 acres of corn in 2017, up from the year previous when just 345,000 acres were put into the ground.

Without the strong yields to pace the crop, Krahn said, acreage would likely be worse because the current prices aren’t sparking a lot of enthusiasm.

Going forward, Krahn said he isn’t overly worried by the lack of snow in some regions of the province. Timely spring rains are more helpful than snow cover, he said.

“We had almost no rain last summer, so the soil moisture was depleted for sure,” he said.

— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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