Less Crop Damage Sets Back Corn Futures

Corn futures, and all grain markets, initially declined today on the outlook of less crop damage than expected in certain growing regions in the Midwest.  Indiana, the US’s fifth-largest grower of grain, is reporting a better showing of crops after experiencing the worst drought since the mid-1950’s.

Field survey’s conducted recently indicate corn production to be more than one-eighth better than the USDA’s August 10th forecast of 100 bushels per acre.  Even soybean production is looking a little better as well.

Bret Aaron, head of trading operation at Global Futures‘ managed futures division in Encino, CA, stated this morning regarding the current corn futures situation, “The better than expected yield in Indiana surprised some market participants since Indiana was one of the harder hit states by the drought while poor export data reported out of Japan overnight is adding to the negative tone today.”  Aaron added, “…(and) a likely trigger to a slight amount of profit taking after this week’s rally.

The trend for corn futures remains up with the August 10th high firmly in place.  The market is testing this high now, but I need a pull-back lower to feel more comfortable being long corn futures.

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