Corn to Fall in the Next 30 Days?
Bryan Doherty 04/11/2014 @ 9:34am
On April 9, the USDA released its monthly Supply and Demand reportThere was a friendly surprise for corn, and the initial reaction was higher pricesHowever, by day's end, prices ended on a sluggish note with futures losing five to seven centsHistory suggests that prices have a tendency to work lower over the next thirty daysWhy?
As spring fieldwork heats up, concerns about late planting diminishThis is reflected in lower pricesJust as important, the market seems to take a step back after the Quarterly Stocks and Acreage report, as well as the April USDA Supply and Demand reportIn a few short weeks, the unknowns of these reports become KnownFor the next month, there isn't a whole lot of new news from the government that's going to provide directionIf fieldwork progresses without delays, end users and traders either exit or hold off chasing higher pricesAs planting in the South moves northward, actual results begin to surface on weekly progress reports.
In recent years, there has been little correlation between planting progress and final production resultsMany producers will tell you that last year their better corn was probably their later planted cornA number of things had to occur for this to take placeIn the end, it would suggest that, due to the ability of farmers to plant so rapidly, concerns about late planting have less and less validity compared to ten or twenty years agoBear in mind, last year about 40% of the corn crop was planted in one weekIn the end, early weather uncertainties suggested there was little reason for the market to put price premium into cornWithout friendly news, or at least perceptive concerns, prices will drift lowerCorn producers should be prepared to sell in late winter or early spring.
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