While the tech blogosphere explodes with chatter in response to Apple CEO Steve Jobs’ unexpected return and introduction of the much-hyped iPad 2, few are reporting the obvious reality of where the real excitement lies today.
Ask any grain trader and they’ll tell you what we know to be true. Trading corn on Wednesday was far more riveting than the iPad 2 introduction, which largely failed to deliver anything that wasn’t expected.
With regard to commodities – and corn in particular – the air of unpredictability that underscores the massive and unbridled price swings of late has kept even veteran traders on their toes. And despite today’s downward pressure on corn, the fundamentals at play will more than certainly result in a dramatic spring and summer for trading grains.
As Roy Leidahl of AgWeb reported Wednesday morning, corn stocks are tight, while demand remains strong, and competition for acreage is “tough.” According to the report, “more evidence of strong corn markets piled up in recent days from the Agricultural Outlook Forum, trade reports, and private analysts.”
USDA-FAS economist Michael Jewison in his outlook presentation said that the United States has little cushion of corn and soybean supplies in the event of adverse weather. “USDA projects U.S. planted area for corn up 3.8 million acres from last year to 92 million and for soybeans up 0.6 million acres to 78 million,” says the AgWeb commentary.
“If weather is perfect here and abroad we won’t run out,” PFGBest analyst Tim Hannagan, says. “Season-ending corn stocks less than 1 billion bushels are dangerously low,” he says, and the 2011-12 corn marketing year “will start more bullish than the current year.”
“There is less than no room for error in the growing season,” Hannagan adds. “We know what we need to plant, but realistically, what can we plant? We have to steal acreage from other crops.”