What to expect for a corn price range in 2018

The agricultural economists at the University of Illinois have been championing a new era for grain prices since the rise of ethanol as a major player in the U.S. corn market.

Scott Irwin is an agricultural economist from the University of Illinois. He and his colleagues believe grain prices have achieved a new higher plateau era. An era that started just after Congress mandated renewable fuels be ramped up in the U.S. gasoline supply over a ten-year period beginning in 2005. Irwin says it is the third such era:

Irwin 1

The current range for corn is something like $3 dollars per bushel on the low end and $8.00 on the high. The highs come less frequently, usually driven by a weather related short-fall. Consequently, prices spend more time on the lower end of the range than the top end. However, he doesn't really know why the prices are so range-bound:

Irwin 2

The mid-point, by-the-way, of that range in Illinois since 2006 has been about $4.50 for corn. However, Irwin says corn prices over the last four years have averaged about $3.50 per bushel. He thinks this means corn prices are due to go higher. However, marketing on that belief is difficult:

Irwin 3

Admittedly, Irwin has more confidence in his ability to predict the mid-point than the movement of prices. Mostly he says the upward moves are predicated on weather problems.


Sponsored Content

Sponsored Content