Prices for corn and soybeans soared to their highest value in 30 months as the U.S. government slashed inventory forecasts, which indicates a tighter supply of food to meet an increasing demand, Bloomberg reports.
As the globe's top exporter of grain, the U.S. saw its corn production slip nearly 5 percent in 2010. Pre-2011 harvest supply amounts are slated to be their lowest in 15 years.
"There's no room for error anymore," Dan Basse, the chief of Chicago commodity consultant AgResource, told Bloomberg. "With any weather issues, we're going to make new all-time highs in corn and soybeans, and to a lesser degree, wheat futures."
March-delivery corn futures shot up 24 cents, a 4 percent increase to $6.31 per bushel, the closing price on the Chicago Board of Trade. During the past year, the price of corn has shot up 61 percent as both soybeans and wheat have climbed more than 40 percent.
"The pressure is acute, in terms of planting fence row to fence row, and really getting the message out to farmers that they need to be planting up their front yards," he said.
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.