The grain markets have gotten off to a good start this year. One broker says there are several reasons corn buying has picked up recently.
“Primarily would be, I guess, if I had to rank them, they started buying when corn was a really good value. And what I mean by value is if you were to go out and buy a bushel of corn, you could buy it for less than the cost to grow it. And so that’s what I call a bargainer. So a lot of value buys by end users. We saw exports really rapidly pick up this year and we’ve seen a lot of investment money come into the corn market,” said Brian Doherty.
Other brokers still have tariffs in the back of their minds. While President Trump has changed his tune to some degree, tariffs are coming to places like China.
“We’ve heard 10% as of February 1st, but that’s a far cry from the 40, 50, 60 percent that was said during the campaign. On the corn side of things, the thing that we have to be a little bit careful about is the 25% tariff that will be imposed on Mexico and Canada as of February 1st. That could be a situation that the new crop corn could run into to issues when it comes to going to Mexico, our #1 buyer,” said Greg McBride.
Traders are also watching the situation out of Colombia. There was pushback from the country over the weekend on President Trump’s deportation plan, but the situation was quickly resolved with threats of tariffs on Colombia. President Trump says they are still on the table and will be rolled out if Colombia causes any more issues. The South American country is the fourth largest buyer of U.S. corn.
