CHICAGO, Illinois (Agriculture.com)–The CME Group corn market closed limit down on improved planting weather outlooks Thursday.
The July corn futures settled down the 30 cent ‘limit’ at $7.29 1/4. The contract traded around $7.24, synthetically. The July soybean contract closed 31 cents lower at $13.53 1/2. The July wheat futures closed 34 1/2 cents lower at $7.76. The July soybean meal futures settled $7.60 per short ton lower at $354.20. The July soyoil futures closed $1.48 lower at $56.93.
In the outside markets, the NYMEX crude oil is $0.10 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 36 points. Since 1980, silver hit a new record price of $50.
“As I said yesterday, with exact scenario today, we left technical gap areas below and the first one was $7.49,” one CME Group corn pit trader says. But, I believe it’s merely about healthy corrections. Otherwise, the market is still bullish long term.”
Tim Hannagan, PFGBest.com senior grain analyst, says corn, wheat and beans continue to remove the recent weather premium, as this last system is now over and there’s not another appreciable rain until next Thursday now. “This has the trade thinking some spring wheat and corn could be planted early next week in the upper Plains. But, even if planting occurs, heavy rains enter on May 6 & 7 and then again May 11 & 12, leaving us generally well behind on planting,” Hannagan says.
Rich Feltes, RJ O’Brien market analyst, says, weather concerns don’t stop after planting. “The market is still going to be hanging on the edge needing to know the crops will be getting timely precipitation in the absence of summer heat. For that matter, for the late planted areas, we will need later than normal frostings. And we won’t know that for months,” Feltes says.
he 80 acres of rich farmland that Jeff Freking and his brother Randy bought near Le Mars, Iowa, on Monday for $10,000 an acre would seem to have nothing in common with a condo in Miami or a house in Las Vegas.
But as prices for agricultural land surge across America’s grain belt, regulators are warning that a new real estate bubble may be forming — echoing the frothy boom in home prices that saw values in Miami and Las Vegas skyrocket and then plummet.
“It just seems to be going up in leaps and bounds here,” said Jeff Freking, who bought a similar farm, also in northwestern Iowa, for $6,000 an acre just two years ago. “Everybody thinks it’s crazy.”
The surge in prices has been dizzying throughout the Midwest, with double-digit percentage increases last year in Illinois, Indiana, Iowa, Kansas, Minnesota and Nebraska. In parts of Iowa, prices for good farmland rose as much as 23 percent last year, according to the Federal Reserve Bank of Chicago.
Just a few years ago, farmers marveled as land prices began to rise in response to demand for corn to make ethanol. More recently, soaring prices for wheat, corn, soybeans and other crops have driven the increase. Corn futures on the Chicago Board of Trade closed at $7.27 a bushel on Tuesday, up from $3.70 a year earlier. Soybean futures were $13.67, up from $9.52 cents on March 1 last year. Average grain prices, adjusted for inflation, are nearing the giddy levels they reached in the late 1970s, the peak of the last disastrous boom-and-bust cycle for agricultural land.