Corn Prices Poised to Rise Amid Tight Supplies and Strong Demand

Global corn supplies are tightening, and demand remains strong, according to Mike Zuzolo, founder of Global Commodity Analytics. The fundamentals behind corn are the strongest they've been in years, with tight U.S. ending stocks. The situation is comparable to the 2012 drought.

Tight global stocks, weather concerns in key growing regions such as Ukraine and France, and resilient demand will influence corn prices as producers move into harvest. Zuzolo notes that world stocks are becoming increasingly important, and if Ukraine remains dry, the next stopping point for December corn could be around $5.35 to $5.50.

Zuzolo also suggests keeping an eye on the European market, specifically Paris corn, which has been a good indicator of corn prices in the past. He believes that if this price stays above $8 over the next 30-40 days, it could be a sign of stronger demand and potentially higher prices.

Zuzolo advises producers to consider storing their crops as a marketing decision becomes just as important as production numbers. With tight cash supplies globally, he recommends taking on paper positions to cover oneself, especially if futures reach the $5.50 or $5.75 level.