Dry weather in the US Midwest, over an extended period, has turned what some predicted to be a bumper crop -- into a potential disaster for this year's crops. Corn, in particular, has been in the news, with recent prices soaring above $7.00 per bushel, from a recent price in the $5.50 range.
It is noteworthy that corn started the year in the $6.20 to $6.80 range, but weather forecasts, the shaky economy -- and other predictions (of a bumper crop) -- caused choppy price action down to the $5.50 level. Today, corn surpassed the $7.00 level -- and all eyes are on Mother Nature -- and the weather. One expert calls for some potential relief over the weekend, albeit -- not much -- before more oppressive heat (and dry weather) continues in the near-term afterwards.
Some farmers are comparing the weather and crop conditions to the 1988 drought, while others are even bringing up the 1930's Dust Bowl scenario. On the other hand, some say it is too early -- and that the situation is fluid (no pun intended) -- and that we will only know after "pollination," at the end of the summer.
A spike in food prices -- and a potential blip in (food) inflation will not be good news for an already shaky economy. On the other hand, managed futures traders have been caught in choppy market action for quite a while, so sustained trends will be a positive for futures traders.
Please read more here:
http://www.nytimes.com/2012/07/05/us/for-midwest-corn-crop-the-pressure-rises-like-the-heat.html?_r=1
http://www.cnbc.com/id/48058304
It is noteworthy that corn started the year in the $6.20 to $6.80 range, but weather forecasts, the shaky economy -- and other predictions (of a bumper crop) -- caused choppy price action down to the $5.50 level. Today, corn surpassed the $7.00 level -- and all eyes are on Mother Nature -- and the weather. One expert calls for some potential relief over the weekend, albeit -- not much -- before more oppressive heat (and dry weather) continues in the near-term afterwards.
Some farmers are comparing the weather and crop conditions to the 1988 drought, while others are even bringing up the 1930's Dust Bowl scenario. On the other hand, some say it is too early -- and that the situation is fluid (no pun intended) -- and that we will only know after "pollination," at the end of the summer.
A spike in food prices -- and a potential blip in (food) inflation will not be good news for an already shaky economy. On the other hand, managed futures traders have been caught in choppy market action for quite a while, so sustained trends will be a positive for futures traders.
Please read more here:
http://www.nytimes.com/2012/07/05/us/for-midwest-corn-crop-the-pressure-rises-like-the-heat.html?_r=1
http://www.cnbc.com/id/48058304
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