Corn Prospects Are Unpredictable
Bulls and bears more conflicted than usual.
Bryce Knorr
Published: Sep 1, 2008
Traders return from their Labor Day holiday on Tuesday facing prospects that can only be labeled unpredictable. The annual tug of war between bulls and bears is even more conflicted than usual in this year's supercharged environment.
Adding to the mix this week will be the impact from at least two hurricanes. The first, Gustav, looks likely to make landfall as a major hurricane in the middle of the Texas-Louisiana energy complex. Damage to facilities could spark another round of buying in energy, though the government announced plans last week to open reserves to meet any shortfall. While long-lasting damage is not likely, the market remembers how long it took production to recover from the effects of Rita and Katrina in 2005.
A rally in energy would likely add lift to the corn market, but these storms can also bring much-needed moisture into the Midwest, too. While it's getting late in the season to do much good, rains that help beans at the least would be negative. The storm track for Gustav doesn't look like it will bring much if any moisture to dry areas in the eastern Corn Belt. The second storm, Hanna, could help Ohio later in the week.
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