Corn futures have reversed a three-month downward swing to make about a 40¢ per bushel climb since the first of the month. And soybeans can take much of the credit for it, says Craig Turner, analyst for Daniels Trading.
December 2014 corn futures closed Friday at $3.53 after surpassing $3.60 mid-week. That compared to about a $3.20 price the first week of October. Even with the drop, corn prices “stayed above the 20- and 50-day averages,” says Bob Burgdorfer, senior editor, Farm Futures, sister publication to Corn+Soybean Digest. “March was off 6-3/4 at $3.66-3/4.”
Turner says “corn was dragged up” by stronger soybean prices, which pushed $9.80 to $10 per bushel the past week. “The corn market was heavily short,” he says, “and we see rallies after harvest lows. If soybeans are going to make a $1 rally, corn will also go up.
“With very tight soybean stocks, we don’t have the soybean meal. Processors were caught short. I think corn is going to follow soybeans.”
Brugler Marketing and Management noted Friday that “private exporters reported to the USDA an export sale of 101,600 metric tons to unknown destinations this morning (Friday). Weekly export sales came in toward the higher end of expectations on Thursday at 1,031,200 MT.”
Domestic corn demand remains strong on the cattle feeding side, where the October live cattle contract trading above $170 cwt. last week. That was a record high price, according to Consolidated Beef Producers, which assists cattle producers in marketing needs. The record prices showed that demand for beef is strong among consumers, who keep paying high prices at the supermarket and for a good dining-out experience.
Meanwhile, Farm Futures reports that there’s “talk circulating that recent export business and domestic use combined with the late harvest have made storage available for much of the grain. A few farmers this week said short lines at elevators indicated more grain may be staying on the farm.”
Bryce Knorr, senior editor, Farm Futures, notes that with the corn price rally, higher prices are cutting into potential Revenue Protection payments to growers, “so be sure to take advantage of the market's gains.
“Big production, stable demand and rising carryout should limit potential for rallies, with better weather keeping hedge pressure on. If funds flip to a bearish bent, look for corn prices to test $3 with corn grinding lower into 2015.”