Seasonal trends: Corn
There is a strong historical seasonal trend for corn to put in it's highs in early April. See link to charts below.
Chicago prices were pushed to fresh all-time highs last week after the USDA planting intentions report pegged corn acres around 3m lower than the trade was expecting.
It is worth remembering that this survey was conducted on March 1st, and the price ratio of soybeans:corn has fallen from a "normal" 2.5:1 then, to an abnormal 2:1 now, indeed it's been down to 1.9:1 during this last week.
This ratio strongly favours corn planting over soybeans. Modern planting methods mean that as soon as a (dry) window of opportunity appears US farmers will be well equipped to get planting fast.
Typically, wet weather in early April, while concerning to those who are not planting, does not necessarily affect crop size. History, especially the last decade, has suggested that rain delays, while a concern when occurring, melt away rather quickly once farmers have an opportunity to aggressively plant.
It is also worth remembering that in recent years the USDA have increased corn planted acres by 1.5m between it's March & it's June report.
All this points to actual planted corn cres this year being substantially more than the figure that is currently in the market. How soon the market knows it will determine price action from here on in.
March corn futures seasonal trend
Chicago prices were pushed to fresh all-time highs last week after the USDA planting intentions report pegged corn acres around 3m lower than the trade was expecting.
It is worth remembering that this survey was conducted on March 1st, and the price ratio of soybeans:corn has fallen from a "normal" 2.5:1 then, to an abnormal 2:1 now, indeed it's been down to 1.9:1 during this last week.
This ratio strongly favours corn planting over soybeans. Modern planting methods mean that as soon as a (dry) window of opportunity appears US farmers will be well equipped to get planting fast.
Typically, wet weather in early April, while concerning to those who are not planting, does not necessarily affect crop size. History, especially the last decade, has suggested that rain delays, while a concern when occurring, melt away rather quickly once farmers have an opportunity to aggressively plant.
It is also worth remembering that in recent years the USDA have increased corn planted acres by 1.5m between it's March & it's June report.
All this points to actual planted corn cres this year being substantially more than the figure that is currently in the market. How soon the market knows it will determine price action from here on in.
March corn futures seasonal trend
