Indiana Grain Company, LLC

Posted: 06/30/10

By: tomgrisafi

As our old friend Gordon Linn of the Linn Group is fond of saying this time of year, weather trumps all.

And, for that reason, some are looking past today's crop report and ahead to the next weather forecast.

Many traders anticipate confirmation in Wednesday morning's USDA crop report of what they already know, that US farmers planted more corn and soybeans than even before, ensuring the biggest corn crop in history and a gargantuan soybean harvest to boot.

According to Reuters, analysts expect an Agriculture Department survey of nearly 90,000 growers to show they planted 89.229 million acres of corn and a record 78.183 million acres of soybeans. Both would be up from March, when growers said they would plant 88.798 million acres of corn, the second-largest plantings since 1945, and 78.098 million acres of soybeans, up less than 1 percent from the record in 2009.

"There is a potential for a record-plus crop out there," said analyst Mark McMinimy of Washington Research Group. "But the crop is not yet in hand. Everything is going to depend on weather in July and the first half of August."

While the report may be treated with some skepticism due to heavy rains in late June after the survey was completed (weather that could reduce the soybean tally and curtail corn supplies) there is little doubt that markets are factoring in a supply surge.

But, as always, the smart traders are keeping close watch of the big picture and the variables like weather that could quickly turn things around for this much anticipated largest crop on record.

Source: Reuters