Market Outlook Ahead of the 2023 Growing Season
09 February 2023, US: Hear from FBN® Chef Economist, Kevin McNew’s s market predictions ahead of the 2023 growing season.
In this video, he discusses the future for corn, international conditions in Argentina and Brazil, fertilizer prices and the condition of the US dollar.
To discuss how this could have an impact on your crop insurance decisions, please visit fbn.com/MPCI.
As a grain farmer, I think there’s a lot of reasons to be optimistic. As we head into the 2023 growing season, one of the key things we look for that will differentiate ‘23 from ‘22 is that we look for corn to really kind of take leadership on the next leg up in prices.
Here’s why we think there’s so much optimism around the corn market. First of all, in the last year it’s been a struggle to see corn get exported to world buyers. Several factors have caused a headwind around that.
One is the strength in the US dollar, especially between January and October of 2022, we saw the US dollar climb sharply up 30% against some of the major currencies around the world, which is a huge downgrade in terms of being able to export corn.
Secondly, in the last fall harvest period, we had hiccups and huge disruptions as a result of the Mississippi River and the drought that impeded our ability to export to world markets.
All of those things are reversing course now. The US dollar is actually starting to weaken as concerns and risk around inflation and interest rates are drawing down. And secondly, we’ve seen, you know, export buyers start to step in, especially this week with both Colombia and Mexico showing some interest in US corn.
The other thing that we think is positive heading into ‘23 is the struggles that Argentina and to a lesser extent Brazil are having in their growing season. We think this plays out really sharply in terms of corn, where Argentina will have a very, very downgraded crop and the potential for Brazil to have a worse second season safrinha corn crop, I think adds more fuel to the fire for the corn market.
And then finally, in ‘23, the world is going to be struggling still with high nitrogen fertilizer prices. US farmers are probably in the best position to grow corn because of our abundance of natural gas, which is helping us have reasonably cost nitrogen fertilizers.
But the rest of the world is not so fortunate, and so I think we will see a big pullback in world corn acres where US farmers may be able to at least maintain and possibly move higher.
So overall, we look for solid prices in ‘23 with corn, probably having the best upside potential. Thanks for watching.
Also Read: Industry looking forward to Public-Private Partnership for cotton crop productivity: Mr. Sanjiv Lal, MD & CEO of Rallis India
(For Latest Agriculture News & Updates, follow Krishak Jagat on Google News)