Corn prices put on a dazzling display last week, exploding to three-month highs on the heels of a USDA report.
On Tuesday, the U.S. Department of Agriculture updated its estimates of this year’s planted acreage and shocked markets with a drastic cut of 5 million corn acres.
This news created fireworks across the grain markets, with December corn futures topping $3.60 per bushel. Wheat and soybeans went along for the ride, with Chicago wheat nearing $5.00 and November soybeans topping $9.00.
Despite the slashed corn acres, this year’s plantings will likely outpace 2019, and crop conditions are stellar so far, suggesting a bin-busting crop. If weather stays good, corn supplies could exceed expectations and send prices careening lower again.
As a result, farmers are facing an age-old conundrum of determining when and how to sell this year’s crop that is still growing in the field. If they sell too early, they could miss out on higher prices or commit bushels they may not grow, but if they wait too long, prices could be sharply lower at harvest time.
Bitter Cocoa Market
Cocoa prices are melting lower as resurgent COVID-19 cases threaten to undercut chocolate demand. Worldwide, chocolate is largely seen as a luxury, with consumption rising and falling with economic conditions. The worsening wave of cases in the U.S., China and elsewhere has cocoa traders worried that coronavirus concerns will linger.
COVID is not expected to drastically affect supplies by interrupting cocoa harvest or processing. As a result, markets are projecting a cocoa glut, sending prices for September cocoa futures toward $2,150 per metric ton, near a one-year low.
Gold Shines Brighter
Gold leapt over $1,800 per ounce last week for the first time since 2011, a sign that investors are continuing to chase the security of precious metals.
Walt and Alex Breitinger are commodity futures brokers in Silver Lake, Kansas. They can be reached at 800-411-3888 or www.paragoninvestments.com.
July 05, 2020 at 12:00PM
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Futures File: Corn rockets to three-month high on heels of USDA report - Omaha World-Herald
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High Heels
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