While corn and soy futures started last week off on a bearish note, trader sentiment quickly changed as short term models pointed to more heat building up in the Central and Southern Plains states. As it turns out, this didn’t verify, but the market still closed strong at the end of the week. The upcoming week looks to be a favorable week for both corn and soybeans, as some warmer conditions will be welcome following the cooler trend that has dominated the pattern for the last few weeks. However, the warmth will be partially offset by some lower rainfall totals; this factor will likely dictate trader behavior early in the week. Overall, we believe that the bullish bias that has been driving traders activity over the last few sessions is unfounded, as most crops are still in generally good condition. Even though the last NASS crop conditions report ‘downgraded’ crop conditions from 64% to 62% and 62% to 61% for corn and soybeans respectively (this reflects Good or Excellent crop ratings) vs. the prior week’s report, the fact remains that 2007 has still been a favorable weather year for corn/soy in the major states, with crop conditions still looking positive through harvest. Increased demand will likely be a more significant driver than a supply shortfall resulting from poor weather.

This entry was posted on Monday, July 30th, 2007 at 9:44 am and is filed under Agriculture, Grains. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.