Chicago Board of Trade Market News
Outlook: Current price action in the corn contracts is likely to be something that people look back on in seven months and wonder, “Why didn’t I buy more?” Corn contracts are currently trading below $4.00 per bushel all the way out through December 2016. The probability that corn contracts will coast through 2015 and 2016 below the price of $4.00 per bushel is remote.
The statement that yields are better than expected has turned into a repeated cliché among grain market analysts. USDA is presently projecting a U.S. national corn yield of 171.7 bushels per acre. Price action seems to indicate that many traders believe that the average U.S. corn yield may be larger than this latest estimate. Currently, the average of corn contracts for the remainder of the 2014/15 season can be purchased for less than $3.50 per bushel. The average price of corn contracts for the entire 2015/16 season can be purchased for less than $3.90 per bushel. It is hard to conceive of any corn end-user that cannot lock in a favorable margin when such prices are being offered.