Spring Has Sprung- Time For A Look At Corn Futures!
Corn Futures Traders- Watch These Reports Closely!
I don’t know how it is in your neck of the woods, but where I live, Spring has officially sprung! The grass is green, the flowers are blooming, and the snow has nearly melted from the surrounding mountains. Of course, for the grass to grow, Mother Nature must warm the ground from the long winter freeze.
While the Spring thaw isn’t such a big deal where I live, it’s a huge step towards the start of the 2015 planting season in the US corn belt.
No doubt about it, farmers in the mid-western states are readying their equipment for countless hours of upcoming fieldwork.
But as you may have guessed, it’s also time for investors to start paying closer attention to corn prices.
Why?
Investors will start seeing a flood of United States Department of Agriculture (USDA) planting data starting in the next few days. This new data tends to increase price volatility in the corn, soybean, and wheat markets.
What reports do seasoned investors focus on?
One of the most important releases of the entire year is the prospective plantings report, which occurs March 31st.
Investors watch this report closely because it reveals the results of a yearly survey the USDA conducts with farmers around the country on how many acres of corn, soybeans, and wheat they intend to plant.
It should come as no surprise that the prospective planting report (also called the planting intentions report) sets the tone for grain trading for the season.
But that’s not the only report you need to watch in coming months…
Corn Futures, Crop Progress, And WASDE!
Another closely watched USDA data release is the weekly crop progress reports, which are released every Monday from April through November.
While the early Spring crop progress reports don’t receive as much attention, investors start watching more closely as the planting season progresses. Any delays to planting progress can send bulls rushing into the market.
But there’s more…
Another very important USDA report to watch is the World Agriculture Supply and Demand Estimates (WASDE) release. This highly important data is released once a month, with the next report scheduled for April 9th.
The report is a comprehensive global supply/demand forecast for all the world’s major crops. Investors keep close tabs on the WASDE because it often presents the first sign of a potential global supply deficit (or surplus) for a particular crop.
With all this information in mind, what grain commodities should you be watching this Spring?
I’ve got my eye on corn.
With the commodity still trading near 5-year lows below $4 a bushel, it’s unlikely US farmers will plant as much corn as they have in the past two seasons. After all, why would they plant copious quantities of a commodity that barely produces a profit for them at current prices?
There’s a very good possibility corn trades higher after the prospective plantings report later this month.
But here’s the deal…
Subscribers to my flagship commodity investing service, the Commodity ETF Alert, bought the Teucrium Commodity Trust Corn Fund $CORN in October of last year when the price of corn was still under $3.50 a bushel. In case you’re unaware, $CORN is a commodity ETF that tracks the price of corn.
At the time, our thesis for entering the trade was simple- corn was just too darn cheap!
Fast forward a few months and we’re looking at the possibility of fantastic gains from our $CORN trade due to the reluctant farmer thesis mentioned above.
Time will tell!
Until Next Time,
Justin Bennett
***Editor’s Note*** For a nifty calendar to keep track of all the USDA report dates, click here.
BIO: Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com. With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them. Sign up for our free reports and commodity newsletter at https://commoditytradingresearch.com/free-sign-up.
Category: Corn
