Corn Futures Rise As Stockpiles Fall, Pests Threaten

Mother nature is helping maize traders and the lowly worm.

Teucrium Corn, $CORN, an ETF that tracks the price of the commodity jumped more than 3%. Much of that gain stemmed from a USDA report that corn stockpiles are significantly less than expected. However, it also added to upward price momentum stemming from a government report that corn-eating pests have developed resistance to toxins emitted by genetically-engineered crops, making the U.S. corn crop particularly vulnerable.

Today's outside day in Corn $ZC_F has engulfed every single trading day since March 11. This isn't generally a bearish characteristic $CORN

— J.C. Parets (@allstarcharts) Mar. 31 at 02:23 PM

$CORN Pop! Alright $CORN $DBA

— AC (@wellness_108) Mar. 31 at 01:06 PM

The USDA said domestic inventories came to about 7.006 billion bushels in March. Analysts had expected 7.098 billion bushels, according to Bloomberg. The USDA also projected that farmers will plant 4% less corn this year than the prior year, choosing instead to plant soybeans, which have commanded higher prices.

U.S. Farmers reportedly Planting Lowest $corn Acreage Since 2010

— lumberjax (@lumberjax) Mar. 31 at 01:23 PM

The USDA forecast added upward price pressure, which has built since Russia invaded the Ukraine, the world’s third largest corn supplier.

But perhaps the most threatening news for corn growers–and bullish news for corn traders–came from a National Academy of Sciences study, released in this month. According to the report, cited by Wired, the rootworm can now destroy corn plants genetically engineered to kill it. Rootworms have eviscerated corn crops in the past and genetic engineered crops were considered a major victory against the pest.

The story recalls that quote in Jurassic Park: “life will find a way.” Corn traders might add to kill off crops and support futures prices.

Commodities investors on said the action in corn underscored the importance of investing in softs as a hedge against equities and inflation.

$CORN Glad I held my position. Plenty of catalysts with scattered droughts, Ukraine, chart technicals, commodity inflation across board.

— Andrew C (@Andrew_C) Mar. 31 at 12:16 PM

$CORN +13% YTD vs growth slowing $IWM +0.85% but +2% gets more attention then $CORN +5% intraday, strange

— Stef (@Stef540) Mar. 31 at 01:53 PM


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