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If you think oil prices have been volatile recently, you should see corn prices.
The grain dropped more than 20 percent in one month from record-high levels. But on Aug. 12, we could see a new climb if USDA crop estimates show that Midwest floods caused more damage than first thought.
MarketWatch said:
In its most recent crop report released at the end of June, the USDA projected corn-planted area for the 2009 crop season to stand at 87.3 million acres, 1.3 million higher than its March report. The surprise increase came as farmers planted more corn in the face of higher corn prices, partly offsetting the impact of flooding.
Some analysts said that the June report didn't reflect the full damage of the Midwest flooding, by some estimates the worst since 1993, because it was too early to evaluate the complete impact of the floods. Those analysts expect the USDA's August report will be more bullish for corn prices.
The USDA has conducted more surveys this month and will release a new report on Aug. 12. Some are expecting the report to show falling corn planting area and yields.
"The thinking right now is that the record floods, delayed planting, slow development ... didn't hurt the crop prospects," said Hackett. "Do not believe it."
Before the flooding, the USDA reported that this season's U.S. corn year-end inventories could fall to 763 million bushels, the lowest since 1996. Some analyst expected that the flooding could push inventories even lower.
