Lower Crop Estimates to Affect Corn Futures

What was once thought to be another record crop year corn harvest by the International Grains Council (“IGC”), has been officially revised in the opposite direction.  The IGC has forecasted a nearly three-quarters of 1% reduction of world corn production based on the North American corn crop deterioration.

The London-based IGC has officially estimated farmers across the world will harvest 863M+ tons of corn for 2012-2013, which is almost 54M tons less than forecasted just earlier this month.  This revised corn estimate is down from a nearly 870M ton corn harvest this time last year.

Kevin Craney, a senior commodities broker for RJO Futures in Chicago, stated today regarding the current corn futures situation, “A lack of moisture and record temperatures continue to deteriorate what is left of the corn crop. Global production will be down this marketing year, and that will have an affect on food inflation going forward.”  Craney added, “The current price for corn has started the rationing process; however, higher (corn futures) prices are warranted given the daily deterioration of this corn crop in order to curb demand.”

The trend for corn futures is clearly up, but I am getting the feeling of stiff resistance at these lofty price levels.  I will say outright, based on this commentary today, we may be seeing the high in corn futures soon if we haven’t realized it already…

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