Corn's Weather Market Intensifies

July 23, 2010 02:46 PM
& Margy Fischer
The intense heat across the Midwest is carrying through to the corn market with a vengeance as weather concerns dominate the corn trade. With increasing demand for corn, a short current supply and any talk of yield-limiting weather for 2010 are putting a definite bullish tone into the markets, says Bob Utterback of Utterback Marketing and Farm Journal economist.  

“We’re coming into a time period where unusually the market is very sensitive about the prospects” says Utterback, who was speaking at Farm Journal’s Corn College on Friday afternoon. “The stocks are so tight to use, the corn market doesn’t have a lot of room to be wrong. With stock levels and corn levels below 10%, even a one bushel drop off in national yield will have a 25-30 cents in insurance costs. Right now the market is saying we have opportunity to build this balloon up this market up here in the next two weeks.”

By mid-August, he believes the summer boom will be over and as we move into harvest, the focus will turn to 2011 and acreage expectations. Combining the current bullishness in the corn market, and the potential for concerns over La Nina conditions into next year, he believes there is a chance the market is setting itself up for a two-year bull market similar to 1987-88.

“All that bullishness should be used to put an early premium in the market. That’s when farmers need to be very aggressive taking advantage for 2011. If we get markets back into that $4.50-$4.70/bu. area, we’re looking at some really good profits.”   

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