Friday, June 16, 2023

Food Inflation: "Drought Pushes Corn Into Bull Market"

From DTN Progressive Farmer, December 15: 

December Corn Futures Enter Bull-Market Territory After Closing Above Technical Resistance

The December corn futures contract broke above key resistance levels to close at $5.74 1/2 on June 15, 2023, signaling the shift to a bull market as drought concerns weigh on production estimates.

"If there was an argument between the bulls and the bears today, the bears are throwing in the towel," DTN Lead Analyst Todd Hultman said, noting the contract's 25 1/4-cent jump from the day before. "The bulls now have the momentum."

By closing above $5.56 per bushel, the 100-day moving average price, it indicates traders increasingly believe concerns about drought and the prospect for lower yields....


Via FinViz (also on blogroll at right) Three months, daily prints:

Corn Chart DailyOats Chart Daily

Soybean Oil Chart DailyWheat Chart Daily

However, DTN's Ag Weather Forum, also June 15:

Ag Weather Forum
Concerns About Increasing Drought in Corn Belt Mounting, Some Optimism Lies Ahead

The U.S. Drought Monitor update this morning pointed to drought increasing across much of the Corn Belt, despite some areas of showers that moved through last weekend and early this week. Heavier rains fell across parts of eastern Wisconsin through Ohio and Pennsylvania after the cutoff time for the Drought Monitor, which may come into play next week.

But, overall, another dry week in the Midwest continues to increase concern about this year's crops. Yet not all hope is lost so early this season: The weather pattern is a lot less stagnant than it was from mid-May to early June, which will produce more systems moving through the country.....


Too far, too fast. Hot money chasing a small (relatively) market.