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Corn and wheat still closely linked

Agriculture.com Staff 08/24/2007 @ 7:24am

Part of the story in the corn is US production, including crop tours that are going on this week.

As the growing season winds down, there are still concerns regarding weather. It's hot in the southern Corn Belt and it's still raining in the northern Corn Belt. The rainfall has led to well-publicized flooding, disease discussions and standability questions.

Part of the story in the corn is wheat. There are still many reports in the marketplace about the shrinking world wheat crop, which has caused a scramble for available wheat supplies. It has also caused a ripple effect in corn, as one-sixth of the world wheat crop is used for feed. To ensure adequate supplies of wheat, feeding must be reduced, and corn and other cheaper feed ingredients are being substituted for high-priced wheat.

Every day, it seems a government or widely known analyst adds tidbits of information to the supply/demand situation. This morning, Statistics Canada estimated Canada's wheat crop at 20.3 million metric tons, down 19 percent from last year and slightly lower than the USDA's estimate in August. Earlier in the week, a European firm reduced their estimates of EU wheat and corn production. The net result is tighter world supply/demand tables.

This morning's export sales report showed another phenomenal week of sales, with corn and wheat totals both over one million metric tons and soybeans not far behind at 957,000 metric tons. Seeing the writing on the wall, no one wants to be caught with the proverbial short end of the stick.

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.

Part of the story in the corn is US production, including crop tours that are going on this week.

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