Prices have worked higher on the Chicago Board of Trade, restoring some of the losses of the last few weeks.
Unfortunately, this does not seem to be a trend, just a correction. Corn, soybean, and wheat prices have been consistently lower for months.
Corn and beans have drifted off as the harvest was seen to be better than expected. This was a typical drought scenario, with the reality not being as bad as the fear.
The axiom still applies: Buy the rumor, sell the fact!
Local bins full
Locally, farmers have been shy about admitting how good the yields have been. Many fields, and some farm averages, have been well over 200 bpa for corn.
This has created what I call a “good problem,” that of finding space. Even with much space being added on farms this summer, the bins are full, the elevators are full, the processors are full, and it is Thanksgiving and past.
I have had unhappy customers asking for trucks the last week. I have not performed any miracles. The farmers say they will sell elsewhere if I don’t pick up corn, so there must be miracles out there.
Switch week
This is the week that we stop pricing corn off December futures. First notice day on the Chicago Board of Trade is Friday. On that day, traders with sold hedges in December futures can be required to deliver in Chicago, so we all get out at least before Thursday.
The good news is that there is finally some carry in the market, with March 4 cents better than December futures.
We have had very little carry or an inverse much of the time, as the market has traded the futures as if we have a short crop, with the demand on the front end keeping the futures lower in the deferred months. There is still a two-cent inverse to May futures and an additional 9 cents to July, so this will be a struggle all summer.
Farmers should be aware that this is a market that wants your corn now, and will pay less for it in the future, unless the structure of the market changes.
December corn futures quickly lost almost 45 cents early in November, from 7.55 on the 9th to 7.10 1/2 on the 13th. The next two weeks got us back almost to the recent high again, at 7.53 on Monday.
We are trading at 7.50 this Tuesday morning as this is written.
