New Contract Highs for Corn, Soybeans

July 6, 2012 11:12 AM
New Contract Highs for Corn, Soybeans


This information is provided by Archer Financial Services, Inc., 800-933-3996.

What an explosive week in the grain markets! Values surged to new contract highs in both corn and soybeans now stand at some of the highest levels since the summer of 2008.

The concerns for this crop were largely ignored throughout much of June as global economic concerns and solid early season conditions grabbed the headlines. That all changed as traders returned to trading on June 25.

Corn prices have rallied $1.66 ¾ from the close on Friday, June 22. December corn had managed only one lower close over the last nine trading sessions until Friday’s setback. December corn rallied nearly $.80 this week in just 4 trading sessions.

Like any good "Bull Market" it allowed very little opportunity for those that were trapped in short positions a graceful way in which to exit. The damage to this year’s crop is very real as some yield ideas have now slipped over 20 bu/acre below expectations of just a month ago.

At current prices, I suspect that the market has now discounted a national yield near 148 bu./acre. One widely followed research firm released a yield estimate in corn today above 153 bu./acre, which many in the trade deem too high. (See what readers expect the average national corn yield to be this year.)

The next two weeks will determine whether this corn crop can recover to a 152 bu./acre yield or continue to slip toward 140 bu./acre. If the corn crop is able to stabilize and improve through better weather the remainder of the growing season, we may see December corn trade between $6.00-$7.00.

However, if expected yields slip below 145 bu/acre, then December corn futures may be testing the $7.50 level over the next few weeks. It can be difficult to market beyond this year when production ideas are a growing concern, but producers need to look closely at marketing some of their 2013 crop on further strength over the next month.


(click the charts below to enlarge)


 7 6 12 Market Movement


7 6 12 Prices




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Spell Check

7/7/2012 03:21 AM

  Let's hope those with short positions starve to death. Maybe they can eat all of those USDA reports they love so much.


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