Wednesday, April 18, 2012

Weekly Outlook - Has the 2011 Corn Crop Been Rationed?

Corn prices declined substantially over the past week. May and December 2012 futures have declined by $.26 and $.22, respectively, following the release of the USDA’s WASDE report on April 10.

Recent weakness in old crop prices started with the USDA’s unchanged forecast of year-ending stocks of 801 million bushels. Following the smaller-than-expected estimate of March 1 stocks revealed on March 30, the market had anticipated that the April WASDE report would contain a larger forecast of feed and residual use and a smaller forecast of ending stocks. Additional price weakness has been attributed to weakness in the financial markets associated with a slowdown in the Chinese economy and concerns about the Spanish debt as well as prospects for increased corn acreage in China. New crop prices continue to reflect the larger-than-expected planting intentions revealed on March 30, an early start to the planting season, and the recent improvement in soil moisture conditions in a large part of the Corn Belt.  <Read More>

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