Wide swings in corn futures not tied to fundamentals
An ag economist says it’s been an exciting week for corn trade with limit down and limit up moves.
Ben Brown with the University of Missouri’s Food and Agricultural Policy Research Institute says corn is on pace to finish the week about eight cents higher than last week in both the nearby and deferred contract.
“You look at those trading ranges and we’ve traded at 70 cents in the nearby futures contract in a week,” he said. “That’s really large, historically, relatively large.”
Brown said the much of the market movement can be attributed to computer model trading getting ‘jittery’ on reports of weather concerns and Chinese corn purchases. But he tells Brownfield the market fundamentals haven’t changed.
“We’ve seen increasing demand all Spring so far,” he said.” South America’s crop’s getting smaller, I’d say it’s pushing more international demand our way, [and] there’s concern about the crop size here in the United States.”
He said the next market mover could be the USDA’s June acreage report. Brown is expecting a half a million to 1.5 million acre estimate increase for corn by USDA.