Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
Life-of-Contract High Recorded for New Crop Corn Futures
New crop corn futures reached a new life-of-contract high this week on Wednesday, August 17 ($7.33 per bushel), closing at $7.25 per bushel. Wednesday’s day trade settlement price was two cents lower than the previous day’s close. The recent rally began with the release of USDA’s August 11 Supply and Demand report that lowered the national average corn yield projection to 153 bushels per acre, well below trend line projections and 5.7 bushels per acre lower than the July estimate. Analysts are now looking at the probability of achieving the August estimate both in terms of yield potential and acreage. A recent study at the University of Illinois depicts that Illinois and Iowa, the largest corn producing states, need near trend-line yields to meet USDA’s 12.9 million bushel projection. Go to http://www.farmdocdaily.illinois.edu/2011/08/near_trendline_yields_needed_i.html to view the analysis.
Market Strategy
An old adage says that short crops get smaller as the season progresses. However, that may or may not be the case, much depends upon August weather. The commodity markets remain extremely volatile due to production and global economic concerns. We can expect large price swings in commodity prices to continue. The weekly export sales report, released this morning, was bearish for U.S. corn, bearish for U.S. soybeans, and bullish for U.S. wheat. A rule of thumb in grain marketing suggests that rallies be rewarded by advancing sales where needed. Currently, Dec ‘11 corn futures are trading at $7.11; Nov ‘11 soybeans at $13.53; with July ‘12 SRW wheat at $8.03 per bushel.
Source: DTN
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.