Despite the poor weather conditions earlier this spring that delayed planting across much of the Midwest, America's farmers likely planted a record corn crop, according to USDA estimates. A report released Wednesday projected a total corn crop of over 14 billion bushels, a jump from the previous record of 13.1 billion. The prospect such large production pushed prices lower this week, with December corn falling nearly 30 cents per bushel (-5.4%) to $5.30, the lowest price in three weeks.
As of the beginning of the week, over 25 million acres of corn and soybeans were left unplanted, leaving much uncertainty in the current USDA forecasts. Another report detailing planted acreage will be released at the end of June, giving the markets further insight into this year's crop. Other analysts are still concerned that late-planted crops could have problems as they develop, reducing yields beneath current USDA estimates. For example, some note that the plants' pollination period will be shifted later into July, when hot and dry conditions can interrupt pollination.
As of midday Friday corn for delivery in December (after this fall's harvest) was worth $5.32 and November soybeans were worth $12.95 per bushel.
Petroleum Jumps on Mideast Unease
Crude oil, gasoline and diesel fuel prices were all higher this week, rallying on increasing tensions in the Middle East. Protests in Turkey, upcoming elections in Iran, and the announcement that the United States will soon begin arming rebels in Syria all threaten to add to uncertainty to that region. Although the United States is becoming less dependent on foreign oil as domestic production increases, crude oil remains an internationally traded commodity, vulnerable to headlines from across the globe.
Meanwhile, strong economic data from the United States inspired optimism that the US economy would continue to gain strength, keeping demand for liquid fuels high. By midday Friday, crude oil had experienced a weekly rise of $2.23 (+2.3%) to $98.25 per barrel, the highest price in nine months. At the same time, gasoline gained two cents per gallon (+0.7%) and diesel futures spurted 7.1 cents (2.5%) higher.