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Middle Tennessee | Guys, forgive me for hijacking the thread and stepping on Ray's cool basis resource, but I did post below to my blog:
In a ps, I wonder if the market doesn't react to China's heat wave because, in gross terms, their crop would be 6 weeks ahead of the US crop,
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Like a group of alcoholic co-dependent buddies, corn, wheat, and soybeans continue to prod one another in a downward direction. Early this week, I had a strong feeling that wheat had hit rock bottom after its months-long decline. With a fulsome midweek bounce on significant trading volume and seasonal trends ripening, Chicago wheat contracts gave appearances of double bottoming near $6.50 a bushel. In fact, the low held throughout the week, in spite of rain hitting much the Corn Belt, perhaps bypassing areas within Minnesota, Iowa and North Dakota.
By Thursday, the bulls themselves were self-medicating as the bears threw a surprise party with corn and beans showing up and setting new lows, setting up a re-test of wheat’s support. The raucous selling in beans and corn continued on through end of session Friday. Hedge funds are getting comfortable with the short-corn side of their personalities and it continues to rain. A guy named Northmofarm observed many farmers “shelling above average corn” in the South, putting the first real taste of fresh supply to the hungry cash market in quite some time.
And that cash market is in a race with itself to new crop prices, a race I’m not sure it will win before September expiration. There are a few reasons the bears may flinch. Shipments of corn away from the Gulf ports may seize up. Anxieties over the atypical vulnerability of this year’s crop to frost damage may be amplified as weather forecasts peer into August and September. Support for new crop may show up end users realize that farmers have never been in a stronger position to hold grain. Price-support insurance payments inflated from the drought market may relieve near-term need to make cash sales for revenue. A guy named Markwright posted that in the last 5 years, storage capacity for 2.5 billion bushels came online. I don’t know how much of that is on-farm storage, but it’s a mind-numbing number, and I’m sure people with storage like to see it occupied with grain.
Most recently and maybe most importantly, big bullish news this week is the Chinese hit wave. China is the world’s second leading corn producer, growing 8 billion bushels a year. I’ve posted a map of the regions where corn is grown in that country, with the temperature forecast from wxmaps. From a comparison the two, the heat is centered over much of the most critical growing area. This got some coverage in the ag press this week (not its due), but virtually none from the wire services and was outright dismissed by the market. A leitmotiv here at LKCW is news that market refuses to trade, usually forever. The heat favors the South of China, where more corn is harvested in July (according to the global crop calendar on Nogger’s Blog) and may have made it through the critical heat-sensitive reproductive stages. But that heat wave looks too big and too persistent with too much overlap in growing areas to be a non-event.
 (chinaTemps.jpg)
 (China_Corn.jpg)
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 chinaTemps.jpg (26KB - 49 downloads)
China_Corn.jpg (25KB - 44 downloads)
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Okay Maizing give my your update..
