How Low Can Corn Prices Go?

It's been a while since I've posted... Since then, I've started trying to put my money where my mouth is, so to speak, and dabbled in some speculative trading in options and futures. I'm also starting a financial math masters program, so I thought it would be neat to talk about applying things I learn in the classroom to my own trading ideas. The lessons I've learned from trading on my own to date could be multi-page posts, but today I wanted to write about corn prices and get your thoughts/perspectives on the corn market.

For a little bit of background, corn prices have plummeted from over $8 per bushel during the droughts of 2012 to a little over $3 per bushel today. This summer has been very mild, and the growing conditions near perfect, leading to a record estimate of over 14 billion bushels of production in the US. Driving through rural Illinois, Indiana, and Michigan, I've frequently seen happy and healthy stalks of corn as far as the eye can see.

Last week, I bought 1 corn future expiring in December for $3.3875 per bushel. So far, I feel like I'm trying to catch a falling knife: the price has since dropped to $3.23 per bushel. But here's why I'm still betting on the price rising. That record harvest is still just an expectation. Only 7% of the acreage planted has been harvested. An early freeze, a wet autumn, or anything that limits the harvest will make that projection fall short.

My one concern is the timing of the price rise. I can always roll over the future contract when it expires, no problem, but how long will I have to wait for the price to rise? A friend I talked to recently said his parents are farmers and that over the past year, they saw a lot of cash renters come in to rent farmland and grow corn. The renters were hoping for prices of $6 - $7 per bushel, so $3 per bushel will very likely be disappointing for them and will drop out of the business in droves next year.

What do you guys think?

*Disclaimer: This is not a sales pitch to invest in corn. I am not responsible if you do and end up losing money.