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Warming weather trend on tap for next week – April 27, 2012 - INTL FCStone Blog
International Assets Holding Corporation > INTL FCStone Blog > Posts > Warming weather trend on tap for next week – April 27, 2012
World Food Production Blog

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Warming weather trend on tap for next week – April 27, 20124/27/2012 8:32 AM

CORN: FIRM
The May/July spread exploded to an 18-cent invert due to lack of deliverable supplies (convergence of futures to physical) and little commercial ownership. Instances of “price later” are being offered to producers with a substantial inverted cash market. Traders believe it does not matter with producers “just waiting”. Lower ethanol crush margins are preempting the trend of lower production, implying eventual lower corn usage; an example of pinching off demand. Soft wheat harvest (which appears to be near ideal) will begin historically early in a few weeks allowing for double-crop soybeans to get seeded. Wheat feeding is substantial, replacing corn; another example of “high prices curing high prices”. Scattered rains across the Plains are predicted with a cool weekend forecast for the Midwest. A warming trend is on tap for next week with the western Belt catching up on plantings. Expect a firm start this morning.

Kyle Smith, Mike O'Dea, Ben Parks, Collin Hulse, Ingrid Gronlund