A USDA report released Monday showed the U.S. stockpile of corn was higher than expected, causing a sharp selloff.
In the aftermath of that report, corn declined to $4.35 per bushel, the lowest price since 2010.
The report confirmed the U.S. is no longer perilously short of corn as we were last summer, when prices topped out at $8.06 per bushel.
Corn’s decline is certainly painful for farmers who produce the grain, but is welcome news to end-users such as ethanol producers, livestock feeders and food manufacturers, who all benefit from lower prices.
In the coming weeks, market participants will be warily watching weather and final yield estimates for indications about the size and health of the corn crop being harvested this fall.
As of midday Friday, corn for December delivery was trading at $4.40 per 56-pound bushel.
Tropical Storm Karen sparks gasoline market
Earlier this week, gasoline futures fell to a nine-month low, primarily driven by fears the government shutdown could cause a weaker economy and drain demand for the fuel.
During the last month, prices have fallen 46 cents a gallon (- 16 percent) as domestic supplies climbed and the economic outlook soured.
By Friday, the gasoline market partially rebounded on fears Tropical Storm Karen would hit Louisiana this weekend at or near hurricane strength, potentially knocking out refineries along the Gulf Coast.
This would create a temporary supply shortage, which helped gas prices bounce four cents a gallon off their low.
As of midday Friday, November gasoline futures, which represent the wholesale price for the fuel without taxes or other fees included, were trading at $2.61 a gallon.
Flying blind without Uncle Sam
The government shutdown that began Tuesday has had far-reaching effects for commodities producers and traders who depend on the federal government for statistics about the markets.
As the standoff in Congress continues, market participants are bracing themselves for a lack of fresh data because of federal agencies’ closures.
Among the reports that could go missing are updates on crop progress, tallies of domestic crude oil and natural gas supplies, export statistics, unemployment figuresand national price data on cattle and hog sales.
Without this critical information, some markets may be forced to pare back trading until the underlying fundamentals are better known.
Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.