Posted on 11/15/2010 5:23:28 PM PST by FromLori
The corn market’s rally above $5 a bushel this fall has stirred growing consternation among livestock producers and others dependent on the largest U.S. crop. As the global grain supply outlook tightens, some traders in Chicago are placing bets that prices may double next year.
Over the past week, trading firms including JPMorgan Chase & Co. and MF Global Holdings Ltd. bought call option contracts that would pay off if corn rose above $10 or $11 a bushel next spring. The options are traded at Chicago-based CME Group, along with futures based on grain, cattle, hogs and other commodities.
It’s rare to see trading in so-called “strike” prices at such lofty levels, CME options traders say. The recent trading reflects heightened concern that smaller-than-expected U.S. crops and increasing demand from top buyers such as China will force grain prices even higher in 2011, said Ed Van, a broker in the CME’s corn options pit.
“There’s real risk out there” for higher prices, Van said. He’s been trading in the corn options pit since the contract was launched in 1985 and said he’d never seen an $11 call traded until the past week. “Price rationing could take it up further. I would certainly think we’re headed higher.”
Concern over tight supplies also spilled into the soybean market, where $20 call options traded over the past week, a premium of more than 50 percent over current futures prices.
(Excerpt) Read more at cattlenetwork.com ...
Just hold a stainer under your boo boo the next day wash it off and eat it again
Deer meat just got more expensive.
I like corn, it tastes real sweet
I don’t like peas, they taste like feet
Corn is the king of the veggie fruit group
And it looks te same when it’s in your poop
/charlie waffles
Prices are not going up, the dollar is going down.
I hope the poor Mexicans have lots of ADM stock.
Cows now have to compete with cars for corn and farmers don’t get government subsidies for corn the way fuel producers do.
I believe you are only partially Correcto Mundo!
The drive for Ethanol fuel is a contributing factor, and is a driver too!
Easy solution. Eliminate the requirement that ethanol be used in fuels and eliminate the $0.50 per gallon federal subsidy on ethanol.
$10.00 Holy crap! I should go and buy my Dads farm back!
It won’t happen, much more corn will be grown next year.
Supply / Demand What a concept
One word: Ethanol
“Over the past week, trading firms including JPMorgan Chase & Co. and MF Global Holdings Ltd. bought call option contracts that would pay off if corn rose above $10 or $11 a bushel next spring. The options are traded at Chicago-based CME Group, along with futures based on grain, cattle, hogs and other commodities.”
Jim Roger back in 1989 said that corn would be about $7.00 a bushel in a few years.
If you really believe this and act accordingly, next year you can post as dirtboy millionaire.
Exactly. 30% of the farmland in my area is unused. 2 years ago when corn went from 2.00 to 6.00 lot's of planters that were gathering dust were put to use.
Why does the gubmit push subsidies for a fuel from corn, for us to burn our food in our cars, and fight us like hell when we try to drill and produce oil and gas in the US?
Oh, stupidity has a fine tradition in government, going all the way back to the 1800's when they were giving lever-action rifles to the indians while at the same time sending in the army to force those indians back on to reservations. That policy didn't work out so well for Custer.
We usually buy around 4K# per year.
Plant more corn,and less wheat or soybeans will be planted.Beans are at 12.80 and wheat is 7.00 for March delivery.How high do you think they will go?
It won’t happen, much more corn will be grown next year.
~~~
I think that’s just what’s gunna happen too,,,
We have had 4 bumper crops in a row in my area,,,
Down some this year,,,
Never enough storage space,,,
The farmers wind up having to dump it on the ground,,,
“Corn mountain” is just north of town...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.