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The Odds For $5 Corn Are Slipping
Dry conditions in the Eastern Corn Belt have already been factored into the corn markets, so if rains bring relief to that area, prices will likely take a quick tumble, says Richard Brock, president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
"Except for southern Indiana and Ohio, the Eastern Corn Belt isn't yet experiencing tremendous stress," he says. "If that area gets rain any time soon, the bears will make a move; corn prices will decline and the market will struggle to go much higher for the rest of the year. The key thing is that we still have a lot of old-crop corn available."
The potential for $5 corn is still there, Brock says, but it's more likely for the Dec. '08 crop than the Dec. '07 crop. "We are now in the top 30% of the trading range for corn, and we think the soybean market has hit its high and is ready to make a move downward," he adds. "With adequate rains in the next few weeks, the cash markets will likely be depressed heading into fall."
Farmers with either corn or soybeans on hand should be making plans to sell a portion in the near future, says Brock. On the other hand, if timely rains don't materialize in the Eastern Corn Belt in the next few weeks, prices could still go higher, he adds.
USDA's June 29 acreage report is another factor that could also alter the market outlook, in addition to potential weather scares in the eastern Corn Belt, says Darrel Good, University of Illinois Extension marketing specialist.
"The odds are that the USDA's June 29 acreage and grain stocks reports won't have a big price impact on the market, but one never knows," says Good. "There does seem to be a difference in opinion among analysts over how much corn and soybeans were planted. The bigger question, however, is the one over yield, and we won't see an objective report on that until August."
With much of the corn crop just days away from pollination, the big story remains the weather, says Good. Weather scares will continue to be a strong influence on the market all the way through August, especially if the Eastern Corn Belt stays dry, he says.
"If the corn crop can get adequate rains through pollination, then the chances that you'll see $5 corn prices will go way down," says Good. "After pollination, the four most important factors influencing corn yields will be: July temperature, July rainfall, August temperature and August rainfall. So, the corn markets will likely stay volatile until the weather uncertainties are over."
Dry conditions in the Eastern Corn Belt have already been factored into the corn markets, so if rains bring relief to that area, prices will likely take a quick tumble, says Richard Brock, president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
"Except for southern Indiana and Ohio, the Eastern Corn Belt isn't yet experiencing tremendous stress," he says. "If that area gets rain any time soon, the bears will make a move; corn prices will decline and the market will struggle to go much higher for the rest of the year. The key thing is that we still have a lot of old-crop corn available."
The potential for $5 corn is still there, Brock says, but it's more likely for the Dec. '08 crop than the Dec. '07 crop. "We are now in the top 30% of the trading range for corn, and we think the soybean market has hit its high and is ready to make a move downward," he adds. "With adequate rains in the next few weeks, the cash markets will likely be depressed heading into fall."
Farmers with either corn or soybeans on hand should be making plans to sell a portion in the near future, says Brock. On the other hand, if timely rains don't materialize in the Eastern Corn Belt in the next few weeks, prices could still go higher, he adds.
USDA's June 29 acreage report is another factor that could also alter the market outlook, in addition to potential weather scares in the eastern Corn Belt, says Darrel Good, University of Illinois Extension marketing specialist.
"The odds are that the USDA's June 29 acreage and grain stocks reports won't have a big price impact on the market, but one never knows," says Good. "There does seem to be a difference in opinion among analysts over how much corn and soybeans were planted. The bigger question, however, is the one over yield, and we won't see an objective report on that until August."
With much of the corn crop just days away from pollination, the big story remains the weather, says Good. Weather scares will continue to be a strong influence on the market all the way through August, especially if the Eastern Corn Belt stays dry, he says.
"If the corn crop can get adequate rains through pollination, then the chances that you'll see $5 corn prices will go way down," says Good. "After pollination, the four most important factors influencing corn yields will be: July temperature, July rainfall, August temperature and August rainfall. So, the corn markets will likely stay volatile until the weather uncertainties are over."
