What Traders are Talking About:
* Harvest remains record quick. Corn harvest hit 54% complete as of Sunday, according to USDA, up 15 percentage points from the previous week. Soybean harvest jumped to 41% complete as of Sunday, up 19 points over the past week. Aside from Ohio, the other Corn Belt states are running well ahead of normal on harvest. With open weather forecast for most areas of the Corn Belt into at least mid-October, harvest progress will remain very quick. Corn yields continue to generally be no better than expected, while there are many reports of "better-than-expected" yields for soybeans.
The long and short of it: With corn harvest passing the halfway point and yields no better than expected, harvest pressure on the corn market is likely just about complete. But if soybean yields continue to come in as expected or better, harvest pressure is likely to persist.
* Spain ready to ask for bailout funds. Spain appears ready to seek euro-zone bailout funds as early as next week, according to media reports. But Germany reportedly is telling Spain to wait before seeking help, with the German finance minister saying Spain is taking the right steps. Any push back from Germany is likely tied to the reluctance of its parliament to keep approving bailouts to individual countries. Spain's decision on this matter is seen as a key barometer of how much influence Germany currently has within the euro-zone.
The long and short of it: Hopes for a Spanish bailout could trigger a little movement of money out of safe-haven investments, but investors are far from a "risk-on" attitude.
* Vilsack: We'll have plenty of corn. USDA Secretary Tom Vilsack continues to downplay any shortage of corn the U.S. could face following this summers' severe drought. In comments Monday, Vilsack said, "I don't think the United States of America is going to run out of corn. Wait until the kernels are counted and the (soy) beans are counted to know the impact of the drought." Vilsack also downplayed the impact that this year's corn crop size could have on the decision EPA has to make on whether to grant waiver requests made by several U.S. governors on the ethanol mandates under the Renewable Fuels Standard.
The long and short of it: Vilsack is right, we won't run out of corn. But supplies will be very tight through the 2012-13 marketing year. In fact, some U.S. livestock and poultry producers in the Southeast are already turning to Brazilian supplies to fill feed needs given tight supplies and high costs to rail corn into the region.
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