In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
The final verdict on this year’s U.S. corn crop is down to the wire, and prospects are not good. A hot, dry June was a nightmare for the crop. Corn is now in its critical pollination stage, and with soil moisture conditions already at drought levels in most growing areas, continued lack of rain in July will sharply reduce corn yield. The dip in corn futures prices to $5.51 on June 1 embodied expectations for record large acreage and yield in the 166 bushels per acre (bpa) range this year. Now, conditions have deteriorated, with some private analysts predicting yield as low as 150 bpa.
Triple-digit temps sent corn futures soaring to $7.68 last Thursday before backing off a bit to $7.43 on Friday. Forward futures contracts for September and December 2012, which had been in the $5.05 to 5.10 range in early June, are now in the $6.90s, and contracts for the first half of 2013 are above $7.00.
Contact John T. Barone at email@example.com.