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Benedicte Gravrand, Opalesque Geneva:
Times were good within the U.S. grains market, but now traders must step carefully. The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report, which came out last week (August 11th, 2011) projects lower feed grain supplies for 2011/2012.
Corn production, in particular, is forecast 556 million bushels lower with a reduction in harvested area and lower expected yields. The national average yield is forecast at 153 bushels per acre, down 5.7 bushels from last month’s projection as unusually high temperatures and below average precipitation during July across much of the Corn Belt sharply reduced yield prospects. Usage and exports are also projected to be lower. And the season-average farm price is projected at $6.20 to $7.20 per bushel, up 70 cents on each end of the range.
At the same time, the U.S. corn futures market is preparing to trade within a wider daily margin. Just before the USDA report was issued, CME Group, a derivatives marketplace, announced a hike in daily trading price on its corn futures and derivatives as soon as it received the green signal from the Commodity Futures Trading Commission (CFTC) to lift the limit on the trading price of the commodity. Corn prices currently trade at about $7 a bushel with a limit of 30 cents per bushel, ...................... To view our full article Click here
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