Six months of price rally continues for grain markets

Although the 2010 corn crop was among the largest crops U.S. farmers have produced, increasing consumption of corn and robust demand have contributed to rising corn prices for several months. “For the March 2011 futures contract, the current rally began on June 30, 2010,” said Darrel Good, University of Illinois Extension marketing specialist.  “We’re six months into the current price rally that has gone from US$3.60 to over US$6 now.”

The soybean market also has a similar trend.“The January 2011 contract rally started almost the same day as the corn contract,” said Good, who spoke at an educational meeting during the Northern Illinois Farm Show. “The soybean pattern is similar — that contract has gone from US$9 to over US$14 now.”Good discussed several issues that have contributed to this price rally.

“The drought in Russia this year really affected the wheat crop; it is down about 30 percent,” the marketing specialist said. Argentina is also experiencing a drought.  “They are not a big corn producer, but they are a big corn exporter,” Good explained. “It has not been a good growing season so far and the dry area is a fairly wide area.” Some parts of Argentina have received some rainfall, but not in the corn growing areas, Good reported. Read more...


This blog is written by Martin Little The Global Miller, published and supported by the GFMT Magazine from Perendale Publishers.