media's contribution to the number of reports, facts and figures about the increase in food costs. "Food inflation" has become a fashionable topic among experts.
, so here are real numbers. For when you peel back glossy media cover, there is actually some substance to this issue -. Just so that you can probably use it to bank some solid premiums in the coming months
corn prices will benefit from what is expected to be the tightest stocks to use ratio in history this year (5.0%). Stocks on the use of measures in the amount of corn supply on hand at the end of crop year (September 10th) vs the expected demand for the coming year.
31 March, the USDA released its quarterly grain stocks report which shocked corn trgovaca.Izvješće related U.S. stocks on hand, at 6.523 billion bushels, about 165 billion bushels short trade expectations. What this means, in short, is that, despite higher prices, we use more corn than most anyone expected. When you take into consideration that almost 35% since last year in the U.S. corn crop went to ethanol production, has so much less corn in the market to meet growing world demand for feedgrains. Feedgrain demand has become particularly acute in emerging economies such as China, Brazil and India, where newly affluent middle classes are developing appetites for meat.
scarcer report paves the way for USDA to adjust the end of the section (and thus the use of stock) is lower in the coming month report. This is bullish for almost a month contracts of corn, such as May and July contracts.
, however, the possibility that sellers want to sell deep, deep in the money of attack should look to go further back in time. That means looking at September to December contracts. This is called a new crop of corn, as these contracts will be happy with the 2011 crop of corn (not stocks already on hand ).
Some in the trade have suggested that higher prices will result in more corn acres are planted in the U.S. this spring. This in turn would "ease" bull market conditions that have persisted over the past 9 months. These dealers May want to consider.
Corn planted area is bumped slightly higher in yesterday's report - to 92.178 million hectares from last month's 92.0 million. However, even if it assumes a rich yield of 162 bushels per acre (152.8 in 2010), it still leaves the U.S. with 2012 ending stocks / use of images of 6.9%. Senior Yeah, but still third lowest in history. It is with acreage intentions fulfilled and near ideal growing conditions.
Tight end stocks for 2010 puts the corn market into a situation where close to a perfect time in 2011 in order to avoid the further price surge in 2012. Thus, the price must be extremely sensitive to any planting delays over the next 60 days and no less than perfect weather during the summer growing season.
While the correction happens on the road, it is difficult to predict corn prices trading much lower this year through the planting and growing season, unless the global recovery becomes suddenly and drastically rails.
It is now suggested that selling the premium put in front of the U.S. planting season as a high probability strategy for profiting from the continuous to the higher price of corn this spring.
is recommended to look at managed accounts in the coming weeks in order to determine the appropriate strikes and premiums in the corn market.
(Note slightly aggressive traders: You May consider adding some call premium in late May, June time period, turning shops strangle This approach will seek to exploit the potential period of profits jednom.usjev the ground .)
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