Breakout

Corn Prices Could Hit $9 Soon: Trader

Breakout

It's one of the biggest events of the year in agricultural circles, and chances are you've never heard of it. The ProFarmer Midwest Crop Tour is a four day, boots on the ground stampede through seven states to assess the pre-harvest conditions of the corn and soybean crops. So popular is this annual event, that it even has its own hash tag on Twitter, "#PFTour12," so farmers and ranchers and traders can follow along in real time.

One of them is Kevin Craney, a Senior Commodities Broker for RJO Futures in Chicago, who says the drought-ravaged growing season is even worse than expected.

"Yields (the number of bushels per acre or beans in a 3'x3' plot) are coming in, in some areas, much worse than even the most pessimistic side thought they might be," Craney says in the attached video. "It's not only that, it's the quality of the crop as well which is causing people concern."

While there had been some recent signs that the meteoric rise in grains was topping out, Craney and others say there are buyers waiting for any dip. Which is why he's targeting $9 corn and $18.50 in soybeans.

"The better trade is in soybeans," he says, as foreign demand is sparking ''very robust exports.'' But either way, he says there's "a lot of room left to the upside, a lot more room to run."

His bullish stance comes as some traders had raised the prospect that a scale back or suspension of the federal ethanol mandate would ease demand, as well as reports that some farmers were harvesting earlier than usual, essentially throwing in the towel on the season and moving on.

"We're seeing a little bit of that harvest pressure a little earlier," Craney concedes, but says any price decline has a lot of support.

"There's just not enough corn out there," he says, "when you average it out, across the U.S., you're coming out with very pessimistic numbers."

A sentiment the ProFarmers Tour has confirmed to be true.

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