Welcome to the bulk food market news update.  The big news last week was the release of the January 10th crop report.  The January report is often a market mover because it provides the final numbers on the previous year corn harvest and the first look at the winter wheat crop.  This year’s report surprised the corn market.  The Department of Agriculture reported that the corn crop totaled 13.925 billion bushels which was .5% lower than the December crop estimate.  The decrease in the crop estimate from December to January was based upon a decreased average corn yield of 158.8 bushels per acre compared to 160.4 bushels per acre.  The corn ending stocks estimate decreased to 1.631 billion bushels from the November estimate of 1.792 billion bushels.  Ending stocks are the amount of the crop that is left over from the harvest after demand has been satisfied.  Nonetheless, the 2013 crop was still by far the largest on record shattering the previous record of 13.1 billion bushels set in 2009.  Corn prices rallied strongly on the news, up 5% on the day.  As can be seen in the monthly corn chart below, the corn market is at the bottom of the channel.  As we have stated before, the best time to purchase for the long-term is to buy at the bottom of a rising price channel.

The wheat market was a different story, the crop report raised the May 31, 2014 forecast of ending stocks by 33 million bushels which went against market expectations.  The estimate for wheat acres planted in the U.S. was down from previous estimates.  However, world wheat production remains strong putting a damper on expectations of lower supply in the short-term barring a change in the weather for the worse.  We stated last week that wheat had price risk down to the $5.70 area.  The market closed at $5.69 last week.  As seen in the chart below, price has both horizontal support and support from the rising trendline of the channel.  Again, buying at the bottom of a rising channel is a classic way to go against the crowd and actually “buy low”.

Check out the articles below for a more comprehensive look at the bulk food market news.  Contact us at sales@bulkfoodinternational.com or 816-833-8062 and we can help you get started investing in bulk foods as a tangible asset you have possession of, instead of just a piece of paper.  You can download a copy of our product catalog here.

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