From a mid-August peak of a record $8.49 a bushel, corn December futures have fallen to around $7.40 a bushel today. The spread between corn for December 2012 delivery and March 2013 delivery has narrowed from $0.145 in July to just $0.0375.
The decline is the result of an earlier harvest of U.S. corn this year. As of September 23, some 39% of the corn harvest was complete compared with a five-year average of just 13% completed by that date. The downside, of course, is that the crop is considerably smaller this year so the harvest should happen more quickly. The total U.S. corn harvest this year is expected to yield 272.5 million tons compared with a yield of 313.9 million tons last year.
Another weight on the price of corn comes from Brazilian corn exports, which rose to a record high of 2.76 million metric tons in August according to a report at Bloomberg. Corn for July 2013 delivery currently trades at a discount to both December and March futures on expectations that Latin American harvests will be higher in 2013.
The Teucrium Corn Fund (NYSEMKT: CORN) is about 0.1% today at $48.06 in a 52-week range of $35.23 to $52.71. That’s a drop of just 9% compared with the nearly 75% closure in the futures spread.
Paul Ausick
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