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Corn Tips |
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Corn -
I hope no one in the
USDA got whiplash with the quick turnaround that was seen in this
morning's acreage report. We have fundamentally changed our
feedgrain outlook with much higher acreage numbers to plug into our
projected carryout calculations. That adjusts the picture
considerably.
If you will remember on June 14, my newsletter was talking about how
odd it was that the USDA would have gone ahead and decreased planted
acreage in the regular June S&D report. Many in the trade thought
that this million-acre decrease was just the precursor to a larger
adjustment downward in the June 28 release. Those thoughts were
incorrect as those acres were added right back into the mix this
morning. The surprise in the trade was evident immediately.
Weather is still a very big deal as hot and dry temps are forecast
through the 4th with cooler and wetter conditions seen after that
point. If you’re a trader, which way to go? More acres mean that it
will take even more poor production weather than seen now to
effectively reduce carryout. But that poor weather is occurring
right now. Will it stay hot? Will it rain on cue before pollination?
Friday was a confusing day in the market with both stronger and
weaker trading seen.
Increasing hot and dry weather concerns in the western cornbelt,
where the “good” corn is, have provided for a sharp run up in the
trade this week. Decent, although not excessive, export sales have
bolstered the position. The weakening of the dollar makes our
production more affordable, but we have rallied more than the dollar
has declined. What today’s reports have done is to lower the ceiling
of a potential weather rally but current weather keeps a portion of
that upside potential intact.(thefinancials.com)
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