Corn Losing Some of Its Demand Strength?

November 14, 2011 12:21 AM
 

What Traders are Talking About:


* Feed demand shifting to wheat. Feed makers and livestock producers around the world are turning to cheaper (and more abundant) feed wheat instead of corn. That list includes some in the United States. Late last week, a UK firm confirmed it had signed an agreement to ship feed wheat to the eastern U.S., with the first shipment scheduled to be loaded this week. There was also unconfirmed talk of Brazilian feed wheat being shipped into the Southeastern United States.

The long and short of it: Corn's premium to wheat and the limited availability of corn is causing livestock producers to change feed rations. That has removed some of the support under the corn market, although end-users should still view price weakness in the corn market as a buying opportunity.

* Investors remain cautious toward Europe. Investors showed an initial positive response to the new technocrat governments in Italy and Greece overnight, but caution remains in play as Italian bond yields remain unsustainably high (although down from record highs last week). The euro-zone mess is going to be an ongoing battle that will continue to handcuff markets as there's very little chance for a quick a dramatic turnaround.

The long and short of it: There are indications investors want to be bullish, but there are too many concerns in Europe for them to pin their ears back and wildly buy. As a result, price action is likely to be highly volatile as attitudes continue to shift rapidly.

 

Follow me on Twitter: @BGrete


Need a speaker for a seminar or special event? Contact me: bgrete@profarmer.com

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close