New lows in corn on overnight trading
Interest in investing in agricultural commodities may be on the rise, in spite of overnight trading that pushed corn prices lower, in the wake of continued losses in the price of oil and other commodities.
July 6, 2009
Grains moved sharply lower overnight on sharply lower outside markets and a mostly benign weather forecast. Crude oil moved below major support on Friday and is trading down to the $64 level this morning as the US dollar moves into the higher end of the recent trading range.
December corn traded the lowest levels the contract has seen since early 2007 overnight as November beans will look for support in the
$9.60 area. Weather will be the main issue for the next several weeks as we approach the most important stages of crop development for corn. Still, even with a weather issue most analysts agree that corn should remain in relatively bearish as a result of larger than expected planted acreage. Despite the supply issues with old crop beans, the market has moved lower in sympathy with collapsing corn prices. As far the supply issues are concerned, rationing continues to be accomplished through rallying spreads.
Informa estimated corn yield at 156.3bu/ac and soybean yield at 42 bu/ac. Although it is far too early in the year to estimate yields, the Informa numbers are based on what we’ve seen thus far in the growing season. Some would project a corn carryout over 2.0 billion bushels using these types of yield figures. Look for crop progress figures after the close today.