Tuesday, July 27th, 2010

Corn and soybeans looked to stage a classic dead-cat-bounce today with corn up 4 and beans up 6 cents in the overnight trading but couldn't hold their strength in the day session. Corn closed down 1 cent with new crop beans down 1/2 cent in a day of consolidation. Fundamentally traders are playing tug-of-war with potential record US Corn and Soybeans against devastated Russian crops and below average China crops. Corn is rated at 72% G/E and the crop index is 106 vs last year's 104.5 which resulted in a record yield. Currently this is the best rated corn crop since the big one of 2004.

Corn G/E ratings
State 2009 2010
IA 80 70
NE 78 85
SD 73 76
ND 71 88
MO 59 50
KS 74 72
IL 62 65
IN 63 62
OH 72 61
MI 52 79
WI 55 79

US 70 72

Old crop corn damage has all but shut off the export system with an estimated 500 barges or 27.5 mbu of damage barges sitting on the river in New Orleans waiting for better new crop corn to blend with. The Mississippi River is also at a high enough levels after last weeks rains in IA, WI, and Northern IL to shut down 5 locks to barge traffic. It will be import for water levels to recede heading into harvest so elevators can empty out the grain already sold to the market to make room for the new crop.

Scott Meyer