I don't think many people see exports causing the price of corn to drop two bucks since last August. Most are analyzing the glut of ethanol we have which is the number one user of corn. They're also watching placements and such for livestock which is the number two user of corn. While I can't speak for any other areas than my local one, the corn merchandisers here are a little nervous about ethanol plants selling corn back to them. For the most part, the feed numbers are pretty well known into fall. However, the ethanol numbers are still a moving target. Crude has broke significantly. If Europe continues to screw around over there, the dollar value will gain strength which will put a lid on crude prices. The national average for gas is roughly 20 cents lower than it was a year ago, yet we're still not seeing much of a pick up in demand. Our economy and Europe's economy will have a much larger affect on commodity prices than exports. Locally, wheat is 71 cents cheaper than corn. By July when new crop wheat hits, the bid widens to wheat being 81 cents cheaper than corn.
I'm not arguing old crop corn won't get higher. I'm just not convinced it rallies much on the futures market. However, there are still plenty of pitfalls that could cause things to not get much better. New crop corn has been in a bear market since September making lower highs and lower lows while old crop has basically been in a channel since September. We'll eventually get some sort of weather spike, but can it be sustained? I read the wheat tour numbers. Wow, how things can change in twelve short months. Last year, they came up with 37.4 bushels. This year, they came up with 49. We had two relatively poor wheat years in a row in Kansas. This year looks to be a bumper crop. Will the same happen in corn?
