Twin Corn Ears Push U.S. Yields to Bin-Busting Crop
Comment of the Day

August 01 2014

Commentary by Eoin Treacy

Twin Corn Ears Push U.S. Yields to Bin-Busting Crop

This article by Jeff Wilson for Bloomberg may be of interest to subscribers. Here is a section: 

Crop conditions are the best in a decade for this time of year, government data show, with 75 percent rated good or excellent as of July 27. The USDA probably will boost its production estimate in its monthly crop report on Aug. 12, said The Linn Group, a broker and adviser. The U.S. is the world’s largest grower and exporter.

“There will not be enough storage space for all the extra bushels this fall,” said Roy Huckabay, an executive vice president at The Linn Group in Chicago. He predicted on July 1 that the crop would increase 2.8 percent to 14.314 billion bushels with yields around 170 bushels an acre.


Eoin Treacy's view

Corn prices continue to extend their decline but the pace of the fall has moderated somewhat since early July. A break in the short-term progression of lower rally highs, currently near 380¢, would signal more than a short-term low has been reached. 

The fall in corn and other grains prices appears to have already been priced into shares such as Archer-Daniels- Midland and Tyson Foods. 

ADM almost doubled in the last 18 months and a reversion toward the mean, represented by the 200-day MA, appears to be unfolding. A sustained move below the trend mean, currently near $43, would be required to question the broad consistency of the overall advance. 

Tyson posted a downside weekly key reversal at its late March peak and continues to post a progression of lower rally highs. A sustained move above $42 would be needed to suggest more than temporary support has been found. 


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