Corn Futures Fall To $5.16/Bushel
Great news for California livestock farmers including the hard hit dairy industry. Corn prices took a dump today as USDA released planting figures for the new crop. December corn prices on the CBOT fell to $5.16 a bushel assuring farmers here who depend on the crop for feed will – as of this fall – no longer be forced to pay a high premium for the feed that has severely punished their bottomline for the past two years.
ON Friday June 28 USDA announced that “U.S. farmers successfully overcame a cold and wet early spring this year, planting 97.4 million acres of corn, up slightly from 2012, according to the Acreage report released today by the U.S. Department of Agriculture National Agricultural Statistics Service (NASS).”
“This is the highest acreage planted to corn since 1936 and marks a fifth year in a row of corn acreage increases in the United States.
This growing season did not get off to a good start. Hampered by cold and wet weather in early spring in much of the major corn-producing region, U.S. growers had only 5 percent of the crop planted by April 28, making it the slowest planting pace since 1984. In May, however, the weather conditions improved significantly, helping U.S. corn growers to make great strides in planting. The week of May 19, farmers tied the fastest corn planting pace on record, planting 43 percent of the total crop during that one week. Overall, 63 percent of the corn crop was reported in good or excellent condition as of June 2, compared with 72 percent at the same time last year.”
The bullish USDA report surprised the market who thought planting numbers would be falling. In Chicago the prices for the new crop lost ground, with CBOT corn for December delivery falling as much as 5.2 per cent to $5.11 a bushel before trading at $5.16½ – down more than 27 cents on the day.
Traders had speculated that corn for December delivery would be as high as $6.60 a bushel last summer. But with the big planting and end of the Midwest drought – corn prices appear to be settling down.
By contrast livestock farmers and biofuel makers in California had been paying as high as $7 to 8 a bushel for corn during the Midwest drought last year. Many dairy operators quit the business as the industry is almost totally dependent on imported corn.
Corn price that are still near $7 a bushel in July should fall to around $5.50 by September and further as the year goes on baring some other disaster.