Corn futures exploded higher on Friday and prices continue to rally into Tuesday. The USDA released another surprising report on the corn market last week, where they cut the supply numbers. Traders are facing renewed concerns of just how tight corn supplies really are.
Corn prices have jumped about 50 percent in the last week. That trend could continue until we have confidence of a large crop this season in the U.S.
All indications tell us that farmers will plant a record amount of corn acreage this year. If the weather cooperates this season, we could have ample supplies at the end of the year. This would lead to much lower prices.
We were in a similar setup last year and we know that the weather started out great and then turned fiercely. This led to record corn prices. It is a gamble on what the weather will do this year, but we are starting off with very dry soils. Rains will have to come this spring or we could see corn prices near $8 again.