Corn is now pretty much done with pollination. It has been a very difficult time without much moisture to help with the pollinating process, coupled with excessive heat. Even if you had average moisture, triple digit temperatures can reduce yield during pollination. This weekly Crop Progress Report showed corn good/excellent down 2% to 24%, poor/very poor up 3% to 48%. In my opinion, at this point the damage is irreparable. Possibly if rain came, it could hold the later planted corn. It is going to be interesting as to how the USDA will handle the S&D on the next report. The pipelines are getting tighter and will need to adjust the demand side to make up for the lost supply. Also, we’ll have to see what comes out of the ethanol mandate. If there is no change in the Renewable Funds Standard the corn will probably go higher. If the change occurs, the prices will go down. With prices around $8.00 there is some rationing going on as the export business that usually comes to the U.S. is starting to go elsewhere.
Taking a look at soybeans there is a chance to recover with hope of more rain. At the moment the forecast is mostly dry and the yields are going down. There is talk of soybean yields averaging as low as 34.8 bushels per acre. The question is how will the USDA handle the carryover on the next S&D?
Keep in mind next month the focus will turn to South American planting.
Series 3 Licensed
Senior Commodities Broker
Gerry has over 30 years of experience as a licensed stock and commodities broker. His background includes working with Swift Henke in back-office operations; H. Hentz, where he handled the stock order desk; Drexel Burnham, where he helped set up the commodities operation in Chicago and did business with commercial and retail clients; and Smith Barney, where he served commercial and retail customers. Prior to joining RJO Futures Gerry worked with retail and commercial hedge customers at MF Global.... Read More
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