Markets React to Crop Conditions and Chinese Corn Rumors

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Rumors are circulating that China is aggressively seeking corn from either the US or Argentina.
With the US Department of Agriculture’s crop condition numbers showing another 2% decline in corn and a 3% decline in soybeans, some of the “bears” who have been talking about much “better than anticipated” yields might have to eat a little crow this morning. ¬†The soybean downgrade I can understand, in fact, they cut South Dakota and Minnesota by 10%, I am assuming due to the recent freeze. The corn move on the other hand seems a little out of character, and is just not something I anticipated the USDA doing at this juncture of the game. ¬†Nonetheless, they made the cuts and we are going to be higher out of the gates.
This move by the USDA certainly offsets some interesting comments that were made just a couple of days ago by a member of the Asia Advisory Team of the US Grains Council. The member said that he thought in many areas, such as North Dakota, South Dakota, northern Iowa and in Minnesota, the yields seem to be underestimated and could be revised higher. I heard he specifically said, “It (yields) can’t get worse than this because most of crop that was in poor condition due to adverse weather has already been harvested.” This had many in the trade thinking that we maybe looking at a bump in yields to 149 or even 150 before it is all said and done.

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