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Blacksandfarmer
Veteran Advisor

New crop corn 2014

I just called a local grain terminal in Ohio to see what their prices look like for 2013 new crop corn. I was surprised that new crop corn 2014 was priced higher than 2013. Why would this be?

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rayjenkins
Veteran Advisor

Re: New crop corn 2014

When the market believes there will be an adequate supply of corn that we might have a reasonably sized carryout (great subject of debate about what that is, but let's say that number is 1.5 byn), the market believes it will have to be paid to carry that corn from one crop year to the other....

 

Thus, we have seen the Dec 13/Dec 14 go from an inverst of 17 cents on January 9 to the 10 cent carry that exists today...

 

When the carryouts get to 2 byn, it has not been unusual to see that dec/dec spread go to a 45-50 cent carry...

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