Corn futures fluctuated on Wednesday, as some traders are speculating that low supplies will boost the price of the grain. At 10:41 a.m. EST, corn futures for September delivery were down 2 cents to $4.494 per bushel on the Chicago Board of Trade.
September wheat futures dropped 9.6 cents to $6.926 per bushel.
"Fundamentals for corn are very healthy, as there's concern about the supply side because of tightening feed-grain stocks, Sudakshina Unnikrishnan, an analyst at Barclays Capital in London, told Bloomberg News in a phone interview. "Demand has continued to rise significantly."
Unnikrishnan also said that corn and wheat, along with other fundamental agricultural products, have been trading based on supply and demand considerations, as opposed to the global economic concerns that have buffeted commodities like oil, copper and natural gas.
Commodities brokers have profited handsomely Russia's ban on the export of grain in the wake of the nation's worst drought in decades. Dry weather and high temperatures destroyed 30 percent of the crop planting in 38 different regions.
The supply gap left by Russia has been filled by U.S. corn and wheat farmers, but stockpiles of those grains are running low here as well.
Learn Futures Technical Analysis with The Market's Spine
Give Your Trading the Backbone it Needs to Succeed, The Market’s Spine is a 34-page futures technical analysis guide that details how to read the backbone of recent market activity, explains a handful of indicators that are well known to institutional and fund traders, and more. Expand your futures technical analysis knowledge here.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.