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Will corn need to rally to $8 or beans to $18 to ration the remaining supply?

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By Jon Scheve, Superior Feed Ingredients, LLC

The week’s biggest story was the inverse spread between the May and July contracts.  Inverses mean that the market is short and really needs to find supply.

Corn

Corn rarely sees inverse at this point in the year, so when they show up in the spring, they are a very big deal. The spread opened in late April with May being 23 cents higher than July on Monday. By Thursday’s close it was 51 cents higher.  This kind of spread hasn’t happened since the spring of 2013 which followed the drought year of 2012.

That Thursday was the last trading day on the May futures for most market participants before the delivery process starts on the May contracts.  Therefore, it was also the last day that the May contract had a daily price limit.  From now until its final trading day in mid-May, May futures movement won’t really matter because there are few market participants trading it.  Everyone’s… Continue reading


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