"What do you see?" Kevin Kerr asked me late last week, while displaying the nearby photo.
"Nothing," I replied.
"Right," said Kevin. "That's exactly what a lot of corn farmers have been planting...Nothing! This is a picture I took just a few days ago, while on a fact-finding mission for my Resource Trader Alert subscribers. It's a corn field in Knox, Indiana."
"Well, I'm not an expert on corn fields," I said. "But aren't they supposed to have corn in them?"
"Right," said Kevin. "There's no corn in the field. But that's not the problem. There shouldn't be any corn in the field at this time of year anyway. The problem is that there's not even any corn SEED in the field. This field is still waiting to be planted. That's a big problem. The weather in the Midwest has been so wet that many farmers are late planting their fields. If the bad weather continues for much longer, they won't plant corn at all.
They'll switch to beans. The farmers say that corn is supposed to be 'knee-high by July,' not knee-high by December!"
"Sounds like you're bullish on corn," I remarked.
"Absolutely!" Kevin declared. "This year's corn crop could be much lighter than most folks expect. The plantings just aren't happening. Not yet anyway. So I think corn's going a lot higher over the next few months. This is going to be a very volatile market, but I think it will work its way higher."
A few days after my conversation with Kevin, the USDA confirmed his suspicions: Plantings are trailing well behind last year's pace:
3% of the corn crop was planted, down from 48% a year ago.
3% of the soybean crop was planted, down from 9% a year ago.
34% of the spring wheat crop was planted, down from 39% a year ago.
19% of the cotton crop was planted, down from 30% a year ago.
56% of the winter wheat crop was rated good to excellent, up from 54% the previous week.
This "surprising" news from the USDA triggered a sharp 3% rally in the corn market yesterday. Kevin was not terribly surprised by the report, of course. But he was pleased.
"This is exactly the kind of report I was looking for," he declared yesterday. "This report should put some summer sizzle into agricultural commodity prices."
"It might also take a little sizzle OUT of the ethanol craze," I replied. "Ethanol producers can't be too thrilled about the prospect of higher corn prices."
"You may be right," Kevin concluded. "But I saw ethanol plants going up everywhere. These new plants might lose money making ethanol, but they're gonna be making it anyway...at least for a while. That's another reason corn prices might move higher. Should be an exciting summer!"
"Nothing," I replied.
"Right," said Kevin. "That's exactly what a lot of corn farmers have been planting...Nothing! This is a picture I took just a few days ago, while on a fact-finding mission for my Resource Trader Alert subscribers. It's a corn field in Knox, Indiana."
"Well, I'm not an expert on corn fields," I said. "But aren't they supposed to have corn in them?"
"Right," said Kevin. "There's no corn in the field. But that's not the problem. There shouldn't be any corn in the field at this time of year anyway. The problem is that there's not even any corn SEED in the field. This field is still waiting to be planted. That's a big problem. The weather in the Midwest has been so wet that many farmers are late planting their fields. If the bad weather continues for much longer, they won't plant corn at all.
They'll switch to beans. The farmers say that corn is supposed to be 'knee-high by July,' not knee-high by December!"
"Sounds like you're bullish on corn," I remarked.
"Absolutely!" Kevin declared. "This year's corn crop could be much lighter than most folks expect. The plantings just aren't happening. Not yet anyway. So I think corn's going a lot higher over the next few months. This is going to be a very volatile market, but I think it will work its way higher."
A few days after my conversation with Kevin, the USDA confirmed his suspicions: Plantings are trailing well behind last year's pace:
3% of the corn crop was planted, down from 48% a year ago.
3% of the soybean crop was planted, down from 9% a year ago.
34% of the spring wheat crop was planted, down from 39% a year ago.
19% of the cotton crop was planted, down from 30% a year ago.
56% of the winter wheat crop was rated good to excellent, up from 54% the previous week.
This "surprising" news from the USDA triggered a sharp 3% rally in the corn market yesterday. Kevin was not terribly surprised by the report, of course. But he was pleased.
"This is exactly the kind of report I was looking for," he declared yesterday. "This report should put some summer sizzle into agricultural commodity prices."
"It might also take a little sizzle OUT of the ethanol craze," I replied. "Ethanol producers can't be too thrilled about the prospect of higher corn prices."
"You may be right," Kevin concluded. "But I saw ethanol plants going up everywhere. These new plants might lose money making ethanol, but they're gonna be making it anyway...at least for a while. That's another reason corn prices might move higher. Should be an exciting summer!"
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