Learn about corn crop planting and harvest seasons eon gas card top up

The December futures contract, traded on the CBOT division of the CME, is the new-crop contract. During growing season, farmers will often sell the December futures contract to hedge or lock in the price of corn that is growing and not yet ready for harvest. During the harvest season, the farmers will sell their physical crop and close out their short futures positions by purchasing them back thus closing out the hedge.

The difference between the price of December corn futures and the physical price of corn at a terminal or silo is the basis. The basis is one of the many risks that farmers take. However, the risk of the difference between physical corn prices and the new-crop futures contract is often much less than the actual corn price given the price volatility of the grain. How Corn Prices Are Determined

The key determinate of corn prices each year is the weather across the growing regions in the world’s largest producing nation, the United States. Other factors that contribute to price volatility in corn are ethanol prices, crop yields in other producing countries and the relative value of the U.S. dollar. The dollar is the reserve currency of the world.

When the dollar appreciates, corn becomes more expensive in other currencies. Corn buyers around the world will seek other sources of corn as U.S. based corn becomes less attractive on the global markets and U.S. exports decline. Conversely, when the value of the dollar decreases the price of corn declines in other currencies and the demand for U.S. corn increases making U.S. exports more attractive. How Farmers Choose Which Crop to Plant

Farmers often have choices of which crop to plant on their land each year. Therefore, the price of soybeans is often a factor in the corn crop. When soybeans become more expensive than corn on a historical basis, farmers tend to plant more beans and less corn.

During the winter of 2017, the new crop ratio was trading at the top of the normal range or around 2.6 bushels of corn value in each bushel of soybean value. Therefore, if the prices of new crop corn and soybeans remain around those levels, it is likely that farmers will plant more soybeans during the 2017 planting season and this could put some upside pressure on corn prices while putting downside pressure on soybean prices because of the behavior of agricultural producers. What Influences the Price of Corn

Each year, the price of corn is a function of the ultimate size of the crop in the United States. Inventories, or carryover, from recent crop years, also can influence the price of corn. The larger the carryover is, the less likely that corn prices will appreciate dramatically.

There are so many factors that go into the ultimate price of corn each year. The most volatile season is the period between spring planting and fall harvest in the U.S. as this is the time of the year when there is the greatest uncertainty as to the size of the final crop. As the market enters the 2017 planting season both farmer planting and the weather will be the chief determinant of the path of least resistance for the price of corn.