More and More Traders Think $12 Corn is Possible
Will corn see $12?
A growing contingency of traders is starting to think so. But it will take increased demand from China, higher oil prices to drive an appetite for ethanol, and a horrifically subpar crop this year.
In other words, the conditions are right for this perfect storm.
According to the latest Bloomberg trader survey, corn and soybeans may rise this week as wet, cold weather in the U.S. Midwest threatens to delay planting of the nation’s two biggest crops, eroding yield prospects.
Twenty-four of 31 traders and analysts surveyed from Tokyo to Chicago on April 21 said corn will rise, and 25 respondents forecast a gain for soybeans.
Last week on the Chicago Board of Trade, corn futures for July delivery dropped 0.7 percent to $7.445 a bushel, and soybean futures for July delivery rose 3.5 percent to $13.8975 a bushel.
Last week’s gain in soybeans was expected by the majority of respondents surveyed on April 15, while the drop in corn was a surprise. Since 2004, the surveys have been correct 55 percent of the time for corn, and 53 percent for soybeans.
Bullish on corn: 24 Bullish on soybeans: 25 Bearish on corn: 7 Bearish on soybeans: 6