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The power of a picture

By the end of the day
Tuesday, the corn market was limit up. Why?  A big reason was various
pictures of pollinated corn cobs! In the Internet age, pictures of crops can be
sent to someone’s entire contact list in a matter of seconds. It takes no time
at all for the market effects to snowball. 

No matter what the corn looked like—the market’s attention became focused on
the yield potential of the crop. Adding to this yield focus were several
private crop estimates. The two most widely watched pegged the corn crop at
13.002 billion bushels and 13.353 billion bushels. For the soybean crop, the
numbers were (in billion bushels) 3.145 and 3.139. 

There were other estimates as well, including some under 13 billion bushels of
corn. Some simply used the USDA figures for harvested acres.  Others made
attempts to lower acres, to reflect flooding and drought abandonment. Remember
the USDA is re-surveying a few states for the August report. However, it may be
until the October report before the market has an accurate handle on acres. 

Today, the market’s focus was back on the continual bearish stream of
macro-economic news—the issues in Europe, worries about a double dip recession,
the strong dollar, weak crude oil prices (down over $5), a focus on safety in a
world of uncertainty. Cash and US Treasuries (still perceived as the safest
thing around) are king.

Market participants now have a week without too much new data to look at their
numbers and weather forecasts. More moderate temperatures seem to be the
forecast, but there are big question marks regarding rainfall. 

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