Though just a few weeks ago, predictions for a record US corn crop this year promised a possible decline in prices, now some experts are speculating that unseasonably warm weather in the US Midwest this spring could lead to an increase of US$.60 per bushel of corn, according to a Reuters report.
This may not be a complete shift in perspective in terms of prices but rather an adjustment based on timing: The warm weather means some Midwest farmers are planting earlier than normal this year in hopes of taking advantage of high demand at the end of summer, when stocks are low. If they can deliver by end of summer or early September, that's where the farmers might reap that extra money per bushel.
There is a risk for the farmers, because the likelihood of at least one more frost is high (only once in the past 100 years has there not been a frost in the Midwest between mid-March and mid-April, Reuters says), and farmers are not able to use some forms of crop insurance by planting so early.
But whether the risk pays off for farmers, companies looking to buy the corn may have to pay more, either via a premium placed on the earlier deliveries or if a frost prevents the record crop from happening, thus leading to supply problems similar to last year's.
All the more reason to stay informed: Bookmark WattAgNet.com and Agriculture.com for commodity pricing updates. You might also want to consider attending Petfood Forum next week in Schaumburg, Illinois, USA. On Tuesday, April 4, Joanna Litchfield of the CME Group and Bob Bresnahan of Trilateral will discuss commodity risk management and how to mitigate the volatility in the commodity market.