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    MARKET EDGES

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RISK REMAINS! Corn plant roots are shallow due to flood conditions earlier in the year and are currently more vulnerable to dry weather conditions. This year's crop is pollinating later than normal which puts it in harm’s way for hotter/dryer August conditions. The lateness of the growth could potentially expose the roots to frost. The same situation holds true for Soy.
  • Texas: EPA Administrator Stephen Johnson and Texas Governor Rick Perry agreed to delay the renewable fuels waiver decision - if prices continue to drop during the delay period it becomes more likely that the EPA will deny the waiver (7/24 was original deadline.) Cattle lobbyists maintain that current RFS mandate, coupled with any unforeseen weather issues, could drive corn to $8 for 2009 season when mandatory blending goes into effect. To put it in context: There are 162 operating ethanol plants with 41 under construction or expansion In the US, with almost all running at significantly less than total capacity. Total US ethanol capacity is estimated at 9.4B gallons currently.
  • Canada: C.D. Howe Institute (economic think tank) sponsored study by University of Guelph (top agricultural sciences school in Canada) has stirred protest from bio-fuels industry groups. Study contends that there are no demonstrable environmental benefits of current bio-fuel process. Canadian media have linked study to World Bank report earlier this year which contended that bio-fuels were responsible for 75% of global food inflation.
  • South Korea: Increasing use of black sea barley for stock feed -Ukraine/Russia harvest expected to be good. This potentially has a negative pressure on Barley buyers in NA as Canadian farmers were more focused on Corn & Wheat due to pricing.
This chart shows pricing levels for the most recent closing price next to the prior closing price for CBOT corn futures contracts maturing between September 08 and December 10.
This chart shows pricing levels for the most recent closing price next to the prior closing price for CBOT wheat futures contracts maturing between September 08 and December 10.