Weekly Market Comments: 7/14/10
Rain Makes Grain
We have been reminded recently that we abandoned a bearish price outlook in May on expectation of a "July drought". July is not over and we agree with this forecast gleaned, last Friday, from Tom Skilling's blog (the CBOT's traders' favorite weather forecaster):
"Though soil moisture remains one wildcard, summer's most intense round of heat could be headed for the Midwest---including the Chicago area---at least a portion of next week. Medium range computer models suggest the expansion of a hot dome of air across the nation's mid-section could push the storm organizing jet north of Chicago next week allowing heat and humidity to build to levels not yet experienced this season."
There is irreparable damage done, to some corn, by standing water, but there are also dry-land fields on high and hilly ground that have never looked better. As of today, there is no long position to be taken on weather alone, as many western corn belt farmers are indicating.
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Today's WSJ has a lengthy front page article on the impact of Congress' financial market regulation overhaul. The article gives a very detailed account on the use of corn/livestock futures in one Nebraska community. |
