US producers relieved by corn price drop
US pork producers can breathe a sigh of relief as corn prices are
beginning to drop following contract highs in June and early July amid crop
concerns as a result of spring flooding.
After reaching a high of nearly $8 per bushel (0.254 metric tonne), December
2008 corn futures are now trading around $5.60.
The falling prices are due to several factors such as lower oil
prices, shrinking ethanol margins, slowing corn exports, increased wheat feeding
and at least some signs of reductions in the swine herd.
biggest factors are the improvement in crop conditions and hopes of a larger
crop than previously expected. On July 27, 66% of the crop was rated in good or
excellent condition compared to only 58% on the same date last year.
USDA's August Crop Production report will provide
key data on planted corn and soybean acres and a more up-to-date grain harvest
forecast. National Agricultural Statistics Service re-interviewed 9,000 farmers
in mid-July to try to get a more accurate picture of actual plantings and
acreage intended for harvest.
That information will be incorporated into
the August production forecasts; however, such data are subject to revision as
the growing season unfolds.
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