Sometimes it doesn’t seem fair that we have to monitor so many potential price aspects and market movers on a daily basis.
You've probably heard the old adage, "Oats know where corn goes." What does that mean?
What a difference a few months make. Back in October, the corn market was assuming carryout near 2 billion bushels. Some prophesied price outlook of doom and gloom, forgetting that low prices cure low prices. Demand picked up for $4.00 corn, and in just a matter of months, enough corn was consumed that carryout went from 2 billion bushels to the most recent USDA data of 1.456 billion bushels. THAT, along with the black swan event of Ukraine’s political situation, is what allowed for the recent near-$1.00 price rally in corn.
After months of lower corn prices and what seemed like an eternity of negative outlook, corn futures showed a flicker of life on January 10 after that day’s USDA report came out with a touch of a friendly tone.
In mid-November the Environmental Protection Agency proposed the first cut in the amount of ethanol that must be blended into the nation’s gasoline supply. The move represents one of the biggest setbacks to date for ethanol. Under a 2007 law,
refiners were supposed to blend more than 14 billion gallons of ethanol into the nation's gasoline supply in 2014. Refiners and oil
companies called the level too high, citing that the higher blend could damage engines, and the EPA said it had authority to roll
It is a telling sign regarding demand for a commodity when at harvest, in the midst of higher-than-expected nationwide yields, local cash price remains stronger than Chicago Board of Trade price. That’s exactly what is happening now throughout the Midwest. Producers are selling soybeans out of the field, opting to store corn at home, but cashing in on soybeans as the price is the most favorable.
Certainly traders will be watching weather conditions in September, and how they will affect the grain markets. Livestock producers are anxiously watching grain markets in order to ascertain feed costs going forward. In addition, for both grain and livestock producers, demand is what’s on the mind of traders, and this month there are plenty of reports to help fill in the missing pieces of that equation. Here’s what’s on tap for this month:
Thursday, September 12: USDA Crop Production and Supply/Demand Report
US inventories of cotton are tightening, providing long-term price support, but global inventories should keep a rally in check.
Did you notice the rally that the hog complex experienced
during the month of June? Live hog
prices surged 18% year-to-date and about 40% since bottoming out in late March.
We've all said it. We've all wondered it. "Seriously? Why
does what's happening in Europe's economy affect the price of corn in my
backyard?" Or perhaps you've heard an analyst on TV talk about the economy
in China, the value of the U.S. dollar, interest rates, or any number of
outside market factors that have swayed the price of a commodity higher or
If only things could be simplified. But in a global
marketplace, simplified just does not seem possible anymore.