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.
Corn drives many commodity prices, and corn will continue to be driven by weather, China and ethanol. Planting of this year’s U.S. corn crop — delayed by rain in the Midwest and snow in the northern Plains — is only 4-percent completed versus 26 percent last year and 16 percent for the five-year average. Even so, the rain and snow are a welcome sight to most farmers, who anticipate adequate soil moisture once they get a crop in the ground. But ethanol mandates have not gone away, and China continues to buy U.S. corn.
Increasing Chinese demand for proteins is expected to keep feed demand rising, and the Chinese will need imports to increase corn reserves. So while prospects for a record corn crop have brought corn prices down by $1 per bushel over the last six weeks, overseas and ethanol demands still mean we remain just one drought away from another round of new all-time highs.
Contact John T. Barone at [email protected].