By Jon Scheve, Superior Feed Ingredients, LLC
The USDA had no surprises for corn and beans last week. Now the market will wait for national yield estimates in the August USDA report. A quarter of the Corn Belt is dry, so the next 2 weeks will be critical for the national yield outcome and price direction. The price potential range is still very wide.
Carry versus inverse markets
A market carry is when a nearby futures contract month’s price is lower than a later month’s price. On Friday, December corn closed at $5.52 while March closed at $5.59. This indicates corn supply during and after harvest is expected to be higher than demand usage, so the market is encouraging hedgers to store the grain for later use by paying them the carry spread.
Inverses are when the nearby futures contract month’s price is higher than a later month. For instance, on Friday September corn was $5.56 while December was $5.52.… Continue readingRead More »