Old-crop corn prices received boosts this week, but the further into the future you look, corn prices are dropping.
Jerry Gulke, president of the Gulke Group, says old-crop corn prices were down, but they closed up 11 cents on Friday.
He says that is likely a sign of an increase in domestic demand. May is the delivery month. If ethanol plants or other end users are short, he says, then they will raise prices and try to squeeze you out of it."
New-crop corn prices, on the other hand, are weaker.
"The further out you go, into 2013 and beyond, corn prices are down even more. It’s almost acting like we’re going to curb demand enough that we hurt demand."
- May 2012: $6.62
- July 2012: $6.20
- September 2012: $5.35
- December 2012: $5.24
- March 2013: $5.36
- May 2013: $5.44
According to a recent Farm Journal Pulse
, 66% of this year’s corn crop is in the ground, as of May 2. That figure is just slightly above USDA’s April 29 report
of 53% planted. According to USDA, the five-year average for percent planted by this week is 27%.
Earlier planting could mean bigger yields this fall. Gulke says a lot of people are saying if we grow this big corn crop, that’s probably $4.50 corn. "That’s kind of what the charts project it to be."
Lower Wheat Prices
After 608 samples, the Wheat Quality Council released an expected Kansas wheat yield of 49.1 bu./acre, which is the highest yield estimate in more than a decade.
Informa raised its U.S. winter wheat production estimate, pegging the crop at 1.656 billion bu. -- 163 million bu. above last year. The estimate is 25,000 bu. above Informa's April forecast.
Gulke says he wasn’t surprised by the high yield estimates. "We all kind of knew that."
A lot of wheat has escaped the frost, and the crop is much more advanced than previous years. "I think the bottom line is that we’re going to have a lot of wheat that comes three weeks earlier than normal."
For More Analysis
You can catch Jerry and his daughter Ashley on CNBC on May 9, ahead of USDA’s May 10 estimates of winter wheat production as well as its initial 2012-13 U.S. and global Supply & Demand tables.
AgWeb.com will have full coverage of the May 10 reports, following the report releases at 7:30 CDT.