Corn prices rise sharply amidst crop progress and planting uncertainties
The corn “spot price” rose sharply in May as successive USDA crop progress reports showed corn plantings falling behind multi-year averages. Spot prices are those paid for immediate delivery, while futures prices are exchange-traded agreements to sell a commodity at a future price. Although corn spot and futures prices normally reach seasonal highs in the spring because of uncertainties about the crop size, the price increase in spring 2019 was far larger than in recent years. Corn prices in early June were nearly a dollar above prices in early May, an increase of over 20 percent. Prices have not been this high since June 2016. Whereas, normally, nearly all of a year’s corn acres are planted by the first week of June, only about 67 percent of expected 2019 corn acres were planted by the first week of June 2019. The high market prices reflect uncertainties about whether some of the remaining acres will be planted late, planted to a different crop, or not planted at all. Ongoing trade negotiations and the new USDA Market Facilitation Program—created to assist farmers affected by recent trade disputes—likely added to the uncertainty about how farmers would respond. This chart is based on data in the ERS Feed Outlook released in June 2019.
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