Corn Rallies, Despite Record Harvest

Corn prices topped $3.58 per bushel on Friday morning, the highest price in almost three months. Corn is accelerating higher, even as a record crop is coming in out of the field.

Over a third of the corn crop has already been harvested, and the USDA is expecting that it will be the largest on record, topping 15 billion bushels.

Normally, the harvest onslaught would be depressing prices, but farmers have been holding onto their corn, waiting to sell at higher prices. This is restricting supply, which is helping to fuel the rally.

Meanwhile, there has been strong demand from foreign buyers for U.S. corn and corn-based ethanol, which is helping to sop up the extra bushels.

Longer term, the corn market will likely need to see rising demand from foreigners to consume the ever-growing harvests. Since the early 2000s, U.S. corn production has increased a whopping 50% due to technological and seed science advances.