Corn Prices Challenging Food, Seed, Ag and Ethanol (CORN, MOS, POT, MOO, TSN, ADM, MON, PEIX)

Corn is going to wreck whatever gasoline savings we had going into summer. By driving up the cost of the ethanol gasoline additive and by driving up feed costs for animals, the drought is continuing to pressure the situation. At last look, corn futures were surging higher again as total crop yields have tanked with only limited relief seen from the drought. We saw corn up $0.17 per bushel for the front month to $8.15 for a 2.3% gain. This is now just $0.13 off of the front-month’s high on a contract. The December corn contract was up to a new record after $0.19 gains to $8.12.

At issue is that traders and farmers think that the 146 bushels of corn per acre forecast by the Department of Agriculture is just still too high of an estimate. The belief is that the bushel count is going to be much lower. This is driving interest in fertilizers and potash players, as well as GMO seeds.  Unfortunately, it is acting as a hit against beef and chicken producers as well as ethanol players.

The Teucrium Corn (NYSEMKT: CORN) ETP is up 2.17% at $51.16, above the 52-week high of $50.73.

The Mosaic Co. (NYSE: MOS) is down 0.3% at $58.54 versus a 52-week high of $74.00; and Potash Corp. of Saskatchewan (NYSE: POT) is down 0.9% at $45.17 versus a 52-week high of $60.42.

The Market Vectors Agribusiness ETF (NYSEMKT: MOO) is down 0.3% at $50.20 so far today.

Tyson Foods Inc. (NYSE: TSN) is down 0.4% at $15.01 against a 52-week range of $14.62 to $21.06.

Archer Daniels Midland Co. (NYSE: ADM) is down by 0.4% at $27.43 against a 52-week high of $33.98, while the Monsanto Co. (NYSE: MON) is actually up 0.3% at $87.16 and within striking distance of its 52-week high of $87.77.

We are seeing a big gain in Pacific Ethanol Inc. (NASDAQ: PEIX) with its shares up 9% at $0.356 so far this Monday.

JON C. OGG