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Rain makes grain?

Agriculture.com Staff 06/06/2008 @ 6:40am

The relentless rain in parts of the Corn Belt finally got to the market in the past few days. For both corn and soybeans, concerns include planting the last few acres the first time, replanting some acres after this round of rain is over, and concern that both of these activities will never actually happen.

With the survey over for the June 30th plantings report, some have begun to realize that the information contained in that report will not be highly accurate. It is thought this last round of rains did not factor into farmers' answers. Look for the USDA to do some special survey work, perhaps before the August crop report, to answer the corn/soybean question more accurately.

The trade is also beginning to also focus on next Tuesday's USDA reports, which will include a fresh wheat crop number and updated supply/demand tables.

The eventual northern hemisphere (US, Europe, Russia, Ukraine, etc.) wheat harvest has the potential to finally satisfy anxious consumers who have been waiting patiently for lower prices. This wheat crop will compete with corn and other coarse grains and could take the edge off grain prices (not withstanding weather or other major disruptions). The world has craved a large crop (of anything) and it looks like wheat is happy to oblige.

Exports have probably shifted in the past month or two. First, the Argentine farmers' strike has affected the soy market enough to cause an increase in US exports. This should lower old crop soy carryout to barely acceptable levels. However, the USDA probably overshot with their 2.5 billion bushel estimate of corn exports. While exports are still much larger than last year, the recent sales pace is softer and the USDA could lower their estimate to 2.4 billion bushels. No other category of use is likely to be up, so carryout could be raised for the old crop.

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.

The relentless rain in parts of the Corn Belt finally got to the market in the past few days. For both corn and soybeans, concerns include planting the last few acres the first time, replanting some acres after this round of rain is over, and concern that both of these activities will never actually happen.

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