Another weekend saw parts of Indiana get hit with more rain, and a few western counties experienced hail. This week the market will begin to focus on the quality of the crop.
This week the USDA crop update reports will start assessing the quality of the corn we have in the ground. Doug Werling, with Bower Trading, says that condition figure for the Eastern Corn Belt is not going to be good, “I expect the rating for Indiana, Illinois, Missouri, and Arkansas to be lower than they usually are. We are just not off to a good start, and it is going to be a tough argument to say these areas are going to produce a bumper crop like they have the past few years.”
Werling says, however, the lower rating in the east is not likely to move the market higher, “I say that because the overall condition rating is not a weight average, so the poor condition here in the east will be outset by the good crop condition in the west.”
Werling adds commodity funds, which have been short the corn and wheat market for the past few months, will also watch that quality rating and may feel it is time to change their position. “Friday’s trade was a good example,” he stated. “We saw some funds peeling off their short positions in corn and wheat and being more aggressive in their short position in soybeans.” He added it is dangerous to get too bearish on soybeans, “Demand can still be a supportive factor, and, with the value of the dollar down, that is good news for exports.”
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