Posted by: usset001 | April 20, 2009

The cash price of corn at harvest

Last week I had the opportunity to speak to the Agriculture Advisory Council to the Minneapolis Federal Reserve Bank. I had a spirited debate with one of the members of the advisory council – he believes that the cash price of corn will reach $2.50 per bushel at harvest in Southern Minnesota (assuming “normal” crop development). With an ethanol inflated demand base, I have a hard time imagining prices that low. I can wrap my mind around $3 corn but not a whole lot lower.

What do you think? Based on this mornings weak opening and a new crop basis of 55-60 cents under in Southern Minnesota, today’s new crop corn price is close to $3.35 per bushel. Your thoughts should reflect “normal” corn crop development – all bets are off in a drought.


Responses

  1. We seem to be a market that likes to over react so to see a big crop come off and the market punish us for that would be no suprise at all….


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