As the winter moves on towards Spring and U.S. farmers begin to gear up
for the 2015 planting season, my sense is there is very little downside
price risk to new crop corn futures over the next couple of months.
Over the past six weeks December 2015 corn futures have traded in a
sideways pattern between $4.00 and $4.20 per bu. This is the lowest
level for December futures during this period since 2010. Granted there
are valid reasons for prices to be this low relative to recent years.
Following last year's record yield and record production, U.S. corn
supplies are currently projected to exceed 1.8 billion bu. by the time
new crop supplies are available this fall, a nine year high. In
addition, global stocks are expected to build to nearly 190 million
metric tons, which is a 15 year high.
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