A minimal increase in precipitation in the 5-10 weather forecast for South America was all the nervous market needed to sell off. Traders are trying to get a handle on the actually crop size due to the extreme drought but also noted is the extreme reduction in the world wide demand of corn and soybeans. Ethanol companies continue to struggle with razor thin margins. Livestock numbers continue to decline as is does the demand. Exports have been pleasantly suprising and in line with early preditions for soybeans but are poor for corn. Crude oil prices falling $3.88 a barrel today due to the poor economic confidence did not help the Ag markets today. The weather in South America should dominate the price action for the next 30 days unless something dramatic happens to the economy.
Scott Meyer
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