Corn prices have plunged to new lows as uncertainty about the crop size has created volatility in the markets.
Corn futures on the Chicago Board of Trade made new life-of-contract lows overnight Monday/Tuesday. Futures touched 3.31, breaking the low of Sept. 8, 2009, which was at 3.33-3/4.
The market had flirted with the low earlier. Traders were considering the 3.35 mark the level of resistance, and that held during the day session Monday.
That level was defined June 8 when we traded a low of 3.35, then started a two-week rally that reached 3.67-1/4.
Now, we have lost more than we gained in those two weeks, and we lost it in just over a week.
It is often said that prices go down faster than they go up, and this week proved that!
Big crop, normal crop?
Corn prices are weak and strong for the same reason — uncertainty over the crop size.
Prices are down now because traders are convinced that the early planting is a warning of the record crop to come.
There is a strong correlation between planting date and yield. Corn got planted record early this year, so that results in a record crop according to the paper farmers in Chicago.
Local picture different
Try to find a believer among the men of the soil in northeast Ohio, however.
Here, there is more than concern (I am reluctant to use the more accurate word “whining”) about the condition of the crop. Locally, you find tall and dark corn, short and yellow corn, and blank skips in corn, frequently in the same field.
There are beautiful fields on some slopes, and ugly, drowned fields on some flat areas.
The fields next to my house are an embarrassment to modern agriculture after three weeks of drowning rains prevented good early growth and delayed both spraying and side-dressing.
This is a year to remember why we used to spray with nozzles mounted on the planter. This is a year to remember why we used to plant in the middle of May.
This is a year to remember that farming is not the easy job the city friends think it is. Don’t you just throw the seed out there and wait for the crop? What is it you do all summer while your neighbors are actually working in the shops?
Only farmers understand how much work and frustration this all really is.
For some the soybean crop has been a bigger challenge. I talked to a producer yesterday who said he had replanted some fields twice.
You don’t have to drive far to see bean fields with knee-high growth and fresh planted circles in the same field. There are great beans and embarrassing beans and beans that haven’t emerged in the month of June, and won’t.
So, the tug of war in the country is to decide what corn we will have.
Wednesday, before this is read, we will have the USDA Planting numbers. We will then know what acres we really planted.
That number will be official, but it will not be correct. USDA has no way of knowing about the beans that finally went in this week.
The bean acreage estimate seems to have the most mystery. There are guesses from 76 million to 80 million acres. If the 80 million is right, bean prices are way too high, even given the mixed condition of the crop.
So, we are confused about acres and confused about condition. Out of that confusion has come a new low in corn, but just modest losses in soybeans.
July bean futures made a high of 9.71-1/2 on the 21st, but eased off to 9.54-1/4 this morning (June 22). November futures are now down to 9.15.
The wheat is a different story, with prices modestly lower after making recent highs on five separate days near or at 4.70, then breaking. We traded a low of 4.42-1/2 overnight.