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Market still frets about heat

The hot weather has passed, but the corn market is still on edge as private estimates of the corn crop size begin to circulate. There was one estimate released yesterday and another estimate, by Informa Economics, will be released tomorrow morning.

In advance of these numbers, the market added back some risk premium with a six cent rally yesterday as traders worried that yields would be below trend. The USDA numbers will be released next Friday, the 11th, at 7:30 a.m. CDT.

This morning's export sales report showed very strong sales for corn, both old crop and new crop. The total was over 1.6 million metric tons. Several South Asian countries, especially Japan and South Korea, all purchased US corn as China is no longer supplying the large volumes these nearby neighbors need.

The market believes China will not be a substantial exporter of new crop corn, but really the Chinese government will probably make that decision closer to harvest, or maybe after harvest. The USDA believes they will export 4 million metric tons, but the trade thinks that number is too optimistic.

With the US and China as the two big forces in the corn market, what China does not sell, the US probably will. Remember the larger US export sales that started after the first of the year when China exited the export market. The market is not very focused on demand right now, but will start to be more interested in the coming months as supply concerns lessen.

In contrast to the corn market, the soybean market is hugging the lows on the daily price charts. August is a key month for soybean yield determination and the market is comfortable with the weather and crop prospects. Basically, yield is not nearly as crucial this year for soybeans as for corn. The reality of the situation is that there are more than enough soybeans.

The hot weather has passed, but the corn market is still on edge as private estimates of the corn crop size begin to circulate. There was one estimate released yesterday and another estimate, by Informa Economics, will be released tomorrow morning.

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