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Short comments today…
USDA released the following statement today…
“In response to variable weather conditions in key crop-growing regions, the National Agricultural Statistics Service (NASS) is collecting updated information on 2009 acres planted to corn and sorghum prior to the August 12 Crop Production report.
The June 30 Acreage report included estimates of 2009 planted area for principal crops, based on data collected from producers in early June. To ensure that the August forecasts accurately reflect any changes in planted acreage since June, NASS will expand its routine data collection activities in late July and early August. The agency will ask growers to update their reported acres planted to corn in seven states: Illinois, Indiana, Kentucky, Missouri, North Dakota, Ohio and Pennsylvania. Growers in Illinois and Missouri will also be asked to update their reported acres planted to sorghum. ”
Face value this suggests a reduction in acres on the Aug 12th report but may also increase yield. The states in question are mostly those that were wet this spring. It has been reported that North Dakota alone has 1.2 million acres of prevented plant corn that wasn’t factored into the June 30th report. Loss of these acres in North Dakota is much different than if they were lost in Iowa or Illinois but they are still acres gone assuming the report is accurate.
I would strongly suggest owning call options through the Aug 12th report. This may be a non-event but the market had a major drop from its high and warrants some respect at these levels and knowing this information.
Meal – I have no changes in my thoughts from yesterday. Hogs – I am still looking for a test of the $60.40 range and then down to the cash index area of $59.00 if $60.40 doesn’t stop the market decline. August seems to provide good optimism for a higher cash market but the packers have failed to agree thus far.
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