"I hope this finds you and your family well : )

"I've attached the latest Musings, and, as usual, have the permission of the author for redistribution to Fullermoney subscribers.

"Page 16 contains a very interesting couple of paragraphs on potential breakthroughs in finding sweet spots in shale formations. Previous Musings that I have forwarded (along with this one) make the case that shale formations have sweet spots where drilling will yield substantially higher extraction rates (even now, many companies and governments are modelling shale formations as if they were huge flat areas of equally available natural gas, despite considerable evidence to the contrary).

"On a separate subject, I just spent a week and a half in the corn belt, and 2 things became apparent: the news media frenzy on how the heat wave might destroy the corn crop is pretty much complete BS, as the corn which managed to get planted in between the massive rains during the planting season shows excellent growth and yield potential, which was in fact enhanced by the warm weather following unusually wet conditions. You could actually see the change in corn height over a week of sweltering weather. Some corn was planted very late, betting on a late first frost -- that corn is, naturally, far behind, under 3 feet in height, and showing no signs of tasseling. This part of the crop is very much at risk of an early frost, which is now being forecast as a high probability by Weatherbell Analytics and by Evelyn Browning Garriss.

"On the other hand, it looks to me like the USDA forecasts on a record acreage having been planted with corn are too high, almost as if they forgot to factor in the spring floods. The University of Illinois Ag Department is also reporting that the USDA estimates for the bean crush are considerably above their estimates. And we US taxpayers pay $1billion/week to support the USDA..."

Eoin Treacy's view Thank you for this informative email and for requesting permission to post Musings from the Oil Patch in Comment of the Day. My family and I are enjoying the summer although our eldest daughter can't wait to get back to school next month. She asks several times a day how many more "sleeps" are left to September 1st.

The USDA has proven to be an unreliable forecaster of grain and bean yields not least because they appear to attempt to manage expectations rather than simply report facts. Last year, night time temperatures were an issue with corn crops. It wasn't getting cold enough for the sucrose to swell the ears sufficiently to increase the yield. I wonder how cold the nights were on your trip to the corn belt?

Here is a section from John Macintosh's report "It's a Kind of Magic" posted in Comment of the Day on October 5th 2010:

Nighttime temperatures were at an all time record for several weeks after pollination. Top agronomists have written many papers on the negative effects of high nighttime temperatures on kernel fill, or ear weight, and yet in their September report the USDA used a near record ear weight.

Corn was limit up yesterday as it continues to rally back towards the peaks near 800c, following a larger reaction than any seen since mid 2009. A break in the short-term progression of higher reaction lows would be required to question potential for additional upside.

Soybeans has been ranging with a mild downward bias since February but also firmed yesterday. A sustained move above 1400¢ would reassert the medium-term uptrend.