Corn: Ready For A Comeback?

| May 15, 2013 | 0 Comments

cornNo doubt about it, corn has been a lousy bet for bulls over the past few months. 

Earlier this year, a United States Department of Agriculture (USDA) report revealed this year’s corn crop would likely be the largest since 1936.   As a result, the essential grain plunged from $7.40 a bushel in late March down to $6.10 a few weeks ago.

And over the past few days, corn has done nothing but trade in a choppy range between $6.30 and $6.60.

Take a look…


As you can see, bears have had the upper hand in corn even since the price skyrocketed to $8.25 a bushel in mid-2012.

But bulls may get a reprieve soon…

The USDA came out with their crop progress report Monday and revealed corn planting isn’t going so well.  Wet Spring weather in the Midwest is keeping farmers out of the fields during an essential planting window.

As a result, the US corn crop is currently only 28% planted. 

On average, corn plantings should be 65% done by this time of year.  What’s more, farmers are reporting only 5% of the US corn crop is emerged.  Usually, 28% emergence is expected by this time of year. 

What’s all that mean in plain English?

US corn planting is way behind schedule this year. 

And the farther we go into Spring without significant plantings, the lower yields will likely be come harvest time.  After all, some farmers may switch to soybeans if they can’t get corn planted soon.  Soybeans can be planted later in the season without adverse effects.

And that’s where things get interesting for the price of corn…

You see, investors are counting on the USDA’s lofty 14.1 billion bushel corn crop estimate.  Such a windfall would put the 2013/14 crop yield at an estimated 158 bushels per acre. 

But if Mother Nature doesn’t start cooperating soon, those USDA yield estimates will start coming down- and that’s when bulls may start pushing corn higher.

But before you rush to the grocery store to stock up on cereal, consider this…

US farmers are known for getting things done.  So don’t count them out just yet.  Modern machinery allows farmers to plant their crops quickly and efficiently.

What’s more, according to recent weather forecasts, a drying trend is expected to work its way into parts of the US heartland in coming days.  As a result, there’s a good chance farmers make big headway as May draws to a close.

But if for some reason they can’t catch up, corn prices may start rising in June.

How can you capitalize on rising corn prices?

One of the easiest ways is through the Teucrium Corn Fund (CORN).  CORN is an Exchange Traded Fund designed to track the day-to-day price movements of corn futures contracts.  So if the price of this essential commodity starts rising in June, CORN will follow closely in its footsteps.

Stay tuned to Commodity Trading Research for continuing updates on the 2013/14 corn crop!

Until Next Time,

Justin Bennett

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Category: Corn, Grains

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.