I'm painting a barn in southeast Iowa during one of the hottest times in 20 years. Many of the farmers around me have harvested their corn early to have feed for the cattle. Drought conditions are likely to continue decreasing the supply of corn and beans in the area. This morning, a biker told me that the line of semis waiting to sell their corn and beans at the elevator was a half a mile long. Some of the sales are futures contracts slated for July delivery. Some of the sales are traders taking advantage of the +7.41 spot price. In any event, the drought in Iowa will affect commodity prices here and around the nation. Bloomsberg writes about the impact of the drought here.
How hot has it been? Many days the heat index was over 100. When I go outside my glasses fog up. Yesterday we had a thunderstorm in which the rain evaporated when it touched the ground. These temperatures are predicted to continue in the Midwest. My question is, why are the profit takers selling now? They should follow the rule of demand we teach in class. Wait until the prices are higher.