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Big crops get bigger-not

Agriculture.com Staff 09/05/2008 @ 8:56am

There's a saying that "big crops keep getting bigger." This has not applied to this year's growing season and really has not been relevant for a few years. It's been a while since there's been a good finish to the crop in August and September.

This year's finish is dry in many areas and also cool in the western Corn Belt. The weather has not allowed the crop to mature well, especially given the late nature of planting.

Right now is the middle of crop "guess-timate" season before the September USDA report on Friday the 12th. Apparently, Informa will release their numbers during the trading session Friday. FCStone came out with their numbers already and they were not terribly different from what that firm estimated in August. Informa may be more crucial, as they were closer to the USDA's August crop size.

In any case, the market may be getting comfortable with crop sizes that are not terribly different from the August numbers. This has allowed the influence of lower crude oil prices and the stronger dollar to continue pressuring prices. Commodities are just not sexy any more!

For those who live and breathe corn, wheat and beans day in and day out, this is not necessarily bad. Volatility may come down and it may be easier to track the fundamental factors affecting prices. With prices still at some incredibly high levels, it may be easier to track the basic supply and demand influences in the market, without the outside "noise."

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

There's a saying that "big crops keep getting bigger." This has not applied to this year's growing season and really has not been relevant for a few years. It's been a while since there's been a good finish to the crop in August and September.

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