The following is portion of an article from Agriculture.com.
By Mike McGinnis
- For $12 market, drastic crop damage needed
- Historic commodity prices support $12 corn discussion
- Farmers urged to watch gross dollars not wait for $12 corn
- Rationing keeps corn from $12 level, analyst says
At this year’s Commodity Classic conference, at least one market-watcher suggested that a hiccup in the spring/summer crop-weather, causing reduced yields, would cut further an already 15-year low U.S. corn stocks supply, sending corn futures prices marching towards $12 per bushel.
Meanwhile, some CME Group floor traders have figured that, adjusted for inflation, it’s not unrealistic to believe corn should be closer to the $10.00-$12.00 range vs. $6.00-$7.00 per bushel.
As of this week, the July corn futures contract, the one that would see a $12 price first, traded within a $7.70-$7.72 range. So, is it really possible for the corn market to reach $12.00 per bushel?
Currently, a much slower-than-average planting season is raising eyebrows among traders and analysts. Plus, wet and cool weather conditions forecast for the Midwest through April are perhaps building further arguments for a significant corn market rally.
David Hightower, The Hightower Report co-owner, says corn and soybeans both have support to run sharply higher.
“We have to put this $12 corn price into context. As they relate to alternative fuels, with energy prices running higher, this pushes up corn and soybean prices.”
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Source: Agriculture.com
Posted by Haylie Shipp
