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By Jon Scheve, Superior Feed Ingredients, LLCLast Wednesday, the corn market pulled back to a technical point and Thursday it bounced off it. Fundamentally, crops aren’t made or lost in May, so debates over planted acres and Chinese demand for old and new crop will continue to manipulate prices. In June, weather becomes a factor and it’s impossible to know today what exactly will happen. I expect a bumpy road yet for prices this summer.
By Jon Scheve, Superior Feed Ingredients, LLC Both July and December corn futures closed higher last week compared to the end of the previous week and are still at or above levels from 3 weeks ago. Old crop corn The factors impacting old crop corn prices: Chinese demand for old crop corn is still uncertain, as many in the trade debate how many bushels will be shipped versus being pushed into next year’s crop. As the economy opens and people start driving to work or on vacations, ethanol consumption should increase. Beneficial rain throughout the southern U.S. is keeping the grass green an...
By Jon Scheve, Superior Feed Ingredients, LLC In the last 15 trading sessions, July corn futures closed higher on all but two of them for a total of a $1.40 per bushel increase. Corn hasn’t increased this quickly since the end of June during the 2012 drought and it’s only been 53 weeks since the 11-year market low of $3. Last week prices exceeded $7 — a level only seen three times in history, with the last time being spring 2013. Prices are high because of Chinese demand and continued dry weather in Brazil. U.S. weather hasn’t even been an impact yet on these markets. Despite another ...
By Jon Scheve, Superior Feed Ingredients, LLC The week’s biggest story was the inverse spread between the May and July contracts. Inverses mean that the market is short and really needs to find supply. Corn Corn rarely sees inverse at this point in the year, so when they show up in the spring, they are a very big deal. The spread opened in late April with May being 23 cents higher than July on Monday. By Thursday’s close it was 51 cents higher. This kind of spread hasn’t happened since the spring of 2013 which followed the drought year of 2012.
By Jon Scheve, Superior Feed Ingredients, LLC May corn prices blew past $6, and then a few days later $6.50. Additionally, May futures gained on July futures by almost 10 cents this last week, which is huge, because in a normal week in a normal year a 1-cent move on that spread in a weeks’ time would be a big deal. Basis values across the US also increased another 5 cents this week. These are clear indications that the market is begging for corn and is unable to find it. How much corn is left to sell by farmers? The last USDA WASDE report showed on-farm cash corn prices unchanged at $4.30 f...