Corn surged today to reach the highest level in seven days on sharp short covering. The catalyst today was a surprise announcement from USDA that they would resurvey corn and sorghum acres ahead of the August 12 production estimate. The survey will focus on the eastern corn belt where planting delays were most prevalent. The announcement led to ideas of lower planted acres of corn to somewhat offset the surprise increase in the June planted acres report. This will be the 5th time where corn acres were changed since 1996 each of those adjustments led to a reduction in planted acres. Traders certainly expect this to be the case as well, the big question is how long will the rally continue and for that likely crop conditions will need to deteriorate. Today the corn market was also helped by stronger outside markets with the Dow closing over 9,000 for the first time since November 2008.
Soybeans followed corn higher today with the new crop November contract up $.24 despite thoughts that bean acres may gain due to the new USDA acreage survey. Old crop cash basis levels were weaker today on soybeans with some eastern belt processors taking down time and the export market backing off a dime or so. There seems to be plenty of beans moving to satisfy demand at this point in time but we still have two months before new crop supplies are available so it could still get interesting cash market wise. China failed to sell any soybeans at an auction of some of its state owned reserves as many of the auction prices were set well above world values.
Meanwhile, weekly export sales of 11.8 million bushels were well ahead of the 3 ½ million
needed weekly to achieve USDA estimates.
Congrats to regular reader Mark Buerhle for pitching a Perfect game for the White Sox today!!
Phil
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