Corn Futures Rally on Tight Supply

We talked about the ongoing US drought yesterday, so now it is affecting the corn futures markets as well.  Corn futures have risen four days in a row on the outlook drought is making corn inventories head toward a nine-year low.

According to a recent Bloomberg survey, they estimate corn reserves have dipped 15% from a year earlier – the biggest drop since 1995.  Currently, cash corn prices are double that of the 10-year average!

Corn futures headed higher all week mostly due to positioning ahead of Friday’s major USDA crop report. The report is expected to show a final estimate of corn production down .9% from the most recent forecast, continuing ongoing concerns over tight corn supplies,” said Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, regarding the current corn futures situation.

Corn futures remain down and we are short this market.  Depending on the immediate opening action, I may look to exit corn futures before the USDA crop production report is released.

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