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Markets calm after rain

Agriculture.com Staff 07/28/2006 @ 7:42am

The marketplace is more comfortable with crop conditions even if many farmers in the western Corn Belt are not. An early week rally has vanished. Rain and more moderate temperatures this week have benefited much of the Corn Belt, especially the eastern half. In a situation that's eerily similar to last year, there are the "haves" and the "have nots" -- but they're just in different parts of the belt.

Unlike last year, many in the market are not too worked up about the dry parts of the Corn Belt. Last year, many were surprised with the yields that came out of the dry spots. (Rainfall did improve in the later part of the summer, leading to a good finish for much of the corn crop.) Even in the face of a tighter supply/demand situation, this year everyone is calm about the situation. Of course, the old crop corn is still coming to town and casting a bearish weight on the corn market. While many continue to have bullish feelings about the corn market long-term (one-two years), it seems difficult to stand in front of down moves right now.

Next week may continue to cause anxiety. The hot weather in the Plains will push into the majority of the Corn Belt, and then the forecast has rain. Plus next week there will probably be the first crop estimates, leading up to the USDA report on August 11. To break out of the recent price range, it probably will take a supply issue -- improving/deteriorating crop conditions, rain falling/not falling in the western Corn Belt, forecasts for hot/not hot weather.

The marketplace is more comfortable with crop conditions even if many farmers in the western Corn Belt are not. An early week rally has vanished. Rain and more moderate temperatures this week have benefited much of the Corn Belt, especially the eastern half. In a situation that's eerily similar to last year, there are the "haves" and the "have nots" -- but they're just in different parts of the belt.

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