By Carrie Muehling
BLOOMINGTON – The March corn contract saw its highest price since July to begin this week.
December has seen some support for the corn market, while the soybean trade has been choppy.
“The corn market has definitely reached the highest levels we’ve seen in about five months here. So, a big surge there tied to several different fundamental factors,” said Brian Basting, commodity research analyst with Advance Trading. “There are some ideas that maybe some export business might swing to the U.S.”
Basting emphasized the balance sheet still shows plenty of corn on reserve, but some more export business would make things look a bit tighter. That could be encouraging to farmers as a rebound in old crop prices has given them an opportunity to re-examine strategies for 2014 and to begin to plan for 2015.
In the days ahead, Basting believes South American weather will be a top priority for the market, as farmers there are nearing completion of planting.
“You get into another weather market and as your listeners know how volatile weather markets can be here in the U.S. for our crops in June, July and August. We’re looking at that time period now from mid-December probably all the way into the first of March if you extend that into some of the double crop corn that is grown in Brazil,” said Basting.
The USDA will release its final crop estimates for the 2014 U.S. corn and soybean crops on Jan. 12. The agency will also release quarterly grain stocks and a supply/demand report that day.
In the meantime, Basting said livestock markets are cooling off as cattle markets have declined sharply in December. Cattle prices are down more than $10 from highs reached at the end of October. The hog market is also looking weak based on expansion potential. Questions remain about the PED virus moving forward, although the market is anticipating it won’t be as detrimental this winter. High retail beef prices are weighing on the cattle market.
Carrie Muehling can be reached at [email protected].
