Market Outlook Ahead of the 2023 Growing Season
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.
Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc.
Disclaimer: The purpose of the following material is to promote awareness of risk management concepts and to highlight risk management products, features, benefits and availability. This presentation does not provide full details of policy provisions or approved procedures. Producers should consult with a local agent for specific details and program requirements.
We are an Equal Opportunity Provider. FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN membership is not required to purchase through FBN Insurance LLC, but certain features may only be available to FBN members. FBN Crop Insurance is currently offered in all U.S. states.