Corn Market Searches for Early Low
Size of this year's crop still up in the air.
Bryce Knorr
Published: Jul 26, 2009
USDA reports haven't been especially helpful to the corn market lately, but the agency tossed bulls a bone last week, announcing it would resurvey plantings in seven key states. Traders immediately assumed the move would cut 500,000 to 1.5 million acres from the crop, sparking a brief rally on Thursday. Nearby futures reached their lowest price in almost three years, but were able to close off that mark, raising the possibility of at least a short-term bottom.
Unfortunately, USDA's June 30 acreage estimate was so big, that even that reduction is a drop in the bucket. Add in above average crop conditions and buyers had no reason to believe they should panic. Indeed, South Korea, which put out a tender for 8.7 million bushels of corn, booked only half of it, though the U.S. did offer the best prices.
Without sharply lower yields here, or production problems elsewhere in the world, there's plenty of feed for shrinking livestock herds. To be sure, the size of the 2009 is still very much up in the air, but the most likely cause of damage — frost — won't be in the picture for weeks — many weeks.
To read Bryce Knorr's complete weekly corn review, click HERE.
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