Is the corn market too complacent about planting delays?
At this time of year, corn prices are typically dominated by planting progress and production expectations for the U.S. The USDA’s Crop Progress report showed only 48 percent of the crop planted as of May 10, equal to last year’s slow pace and behind the 5-year average of 71 percent (which includes the slow pace of last year). So far, the corn market has had only a modest reaction to the planting delays. December 2009 corn futures prices are a bit lower than in early April and only about $.50 above the low of the past four months. The very measured response to slow planting progress to date may reflect the market’s focus on other price factors. However, the anticipation of a rebound in U.S. corn exports and another substantial increase in ethanol use of corn during the year ahead, along with a more stable stock market and rising gasoline prices, should all be supportive for corn prices. Perhaps the price response has been restrained due to the experience of 2008 when the effects of som
