Watch For Signs Of Futures Market Peak
Pay attention to what the speculative investors are doing. Watch for clues on whether grain prices have already peaked or perhaps are headed higher.
Published: Jul 13, 2012
Hot and dry conditions across much of the Corn Belt this summer continue to threaten row crops. The new-crop December corn futures price has increased by more than $2 per bushel since June 15, to its highest level in 9 months. With U.S. farmers planting more than 96 million acres of corn, as reported by USDA in its annual survey of planted acreage issued June 30, the average crop yield for 2012 will be critical in determining whether supply is adequate to meet demand for the corn crop.
"Farmers often struggle in making grain marketing decisions in major weather markets," observes Steve Johnson, an Iowa State University Extension farm management specialist. "That's because they're typically watching their own crop conditions deteriorate while futures markets move higher."
Watch For Signs Of Futures Market PeakJohnson provides the following observations and guidelines he has recently gleaned from talking to a number of market analysts as well as farmers, grain merchandisers, elevator managers and others. Accompanying this article are the December 2012 corn futures price chart and the November 2012 soybean futures price chart, both showing how prices are responding to this summer's blistering weather conditions.
How does this year's drought compare with the drought of 1988?
Many people are comparing weather patterns and conditions of this year's drought to that of 1988, the last major widespread drought to hit the Corn Belt. Extended weather forecasts continue to call for hot and dry conditions, which are causing crop stress during the critical pollination period. This extreme heat and recent lack of rainfall have started to reduce yield potential for both corn and soybean crops.
Source: www.futuressource.com, July 5, 2012
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