Corn Futures React to Analysts’ Errors

The discrepancy between the private estimates vs. official government estimates of the current corn reserves seems to be right in the ball-park of the country of Russia’s annual consumption.  This gap in estimation has been causing volatile corn futures price swings at a time of record breaking food costs.

The USDA estimates for corn have been off by approximately 5.7 tons in each of the past seven quarters.  This amount is twice as much as in the past five years alone!

Analyst estimates have really thrown a proverbial ‘wrench’ into markets over the last year.  We are seeing estimate either too low, or too high, and the markets have been doing nothing but reacting to news and numbers.  Overall the industry has to do a better job in reporting otherwise we are going to continue to chop around based on estimates,” stated Chris Hildebrand, vice-president of trading at HighGround Trading Group in Chicago, regarding the current corn futures situation.

The trend for corn futures is technically up, but has been rather sideways since the beginning of the year.  I will continue to look for lower risk trades in the direction of the trend, and at opportune times.

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