Posted by: usset001 | July 16, 2009

Are new life-of-contract lows in grain futures a possibility?

contract

L-O-C low

date

L-O-C high

date

7-15 close

Dec’09 corn

$3.025

9-15-06

$7.02

6-16-08

$3.375

Nov’09 soybeans

$6.70

11-16-06

$15.545

7-3-08

$9.045

Sep’09 wheat (MGEX)

$5.60

12-5-08

$12.00

3-12-08

$6.19

New crop futures for 2009 corn (Dec’09 futures) have been trading for 3 years. The Nov’09 soybean contract has been trading for over 2 1/2 years and Sep’09 spring wheat  for a little less than two years. Life-of-contract low prices for each of these contracts were established early in the trading of each contract. Life-of-contract highs were established at very high levels during last year’s wild bull run.

Who could have imagined last year, when corn reached the $7 mark (and $4 higher than L-O-C contract low), that the market might set a new low before the contract expires in mid-December? It could happen – we are just 35 cents away based on last night’s closing price. Spring wheat is 60 cents away from a new low. These are not big price moves – roughly 10% lower than current market values.

Only soybeans, trading over $2 higher than L-O-C lows, seem safe from setting new low prices.


Responses

  1. I think many would be suprised if DEC corn doesn’t make new life of contract lows…….


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