Now $5...do I hear $6 corn?
CHICAGO, Illinois (Agriculture.com)--As CME Group corn prices head over $5.00 per bushel there's new talk of $6.00 corn.
"The crop progress report Monday showed a 1% decline in the corn/soybean good/excellent rating vs. a week ago. But, this was no surprise and seasonal," one floor trader says. In fact, we have seen some anecdotal reports in Iowa and Minnesota that are touting better yields for corn and continue to get good yields in beans. For corn, it recovered from Tuesday's lower start off of outside sentiment with gold on new highs, the dollar sharply lower and energy firm."
Meanwhile, Tim Hannagan, PFGBest senior grain analyst, says Monday's Crop Progress Report had a positive impact on the markets.
"Monday's overnight market opened higher pricing in the crop condition report, out after that day's close of trading, showing another 1% decline in the good-excellent condition in corn and beans. But, selling entered and carried over to the Tuesday opening. Traders and funds are heavily long with profitable positions. Traders are aware of the fund pattern of taking profits ahead of month-end yet the quick harvest in the corn market and farm talk of poor yields keep speculators buying dips in corn. That's what is happening today. We have had seven consecutive higher starts to the week on Mondays with seven straight lower Tuesday trade. Lows are occurring each Tuesday and or Wednesday weekly now with highs on Friday. But, traders are concerned about a bigger correction coming before positioning ahead of the October crop report begins."
Jack Scoville, PRICE Futures Group vice-president, says the new talk is $6.00 corn, due to weak corn yield reports.
"The yield reports are just not good and the harvest is now into central Illinois and Indiana, so the trend is coming clearer. Bulls are targeting 5.00 Dec Corn for now, but I am now hearing people talk as high as 6.00 if the yields stay bad. Sounds pretty high to me but it could be possible later on," Scoville says.