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Bryan Doherty: A tough start

Agriculture.com Staff 06/16/2008 @ 8:22am

This year's corn crop has been off to one of the more difficult starts in history. With cool and wet conditions plaguing much of the Midwest during the late April through early May window, there was concern that the crop may fall significantly behind. A break in the weather allowed farmers to rapidly plant close to half the corn crop in just over a week's time. Unfortunately poor conditions reappeared, creating a very significant and stressful finale to the corn-planting season as farmers tried to finish. Much of the corn crop was planted in less than ideal conditions.

The corn market is entrenched in an uptrend after bottoming out last October. Looking back, it can be suggested that the fall of 2006 was the definitive bottom to the corn market. Demand caught up to supply and created an environment in which price setbacks proved to be opportunities for end users and speculators. Continued supportive activity developed a weak dollar and strong demand for energy products. A sharp rise in crude oil also spilled over into the corn market.

The last surge in corn prices has come on renewed weather concerns. The USDA took a bold step on the June Supply/Demand report by reducing yield about five bushels per acre. This is a fairly substantial change but probably realistic and reflective of this year's planting and growing conditions. It is very conceivable that 1% to 3% of the crop may not have been planted, not to mention another potential 0.5% to 1.5% that needs to be replanted, which may not occur. In a year of big demand, a must-have crop has magnified implications if weather is a factor. Less than ideal conditions this year have certainly become a factor and the corn market is in the stages of factoring this in.

This year's corn crop has been off to one of the more difficult starts in history. With cool and wet conditions plaguing much of the Midwest during the late April through early May window, there was concern that the crop may fall significantly behind. A break in the weather allowed farmers to rapidly plant close to half the corn crop in just over a week's time. Unfortunately poor conditions reappeared, creating a very significant and stressful finale to the corn-planting season as farmers tried to finish. Much of the corn crop was planted in less than ideal conditions.

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