The rally in US grain futures overnight was said to be fuelled by technical buying and a return to hotter, drier weather across the US Mid-West over the next week or so. Fund money continues to search for the most volatile parking lots. The funds have the ability to push grain around when shuffling from home to home in these times of slim pickings.
US corn has the most fundamental support for a rally after last week’s storms. It will still be another week or so before we know how much of the crop in Iowa stands back up or is buggered but at the moment the punters seem to be gathering on the side that suggest there is more damage than the USDA is suggesting. Winds of 70 -100mph don’t mess around.
The crop progress report was out after the close, the punters were thinking that the USDA would reduce the good to excellent rating for corn to about 68%, it came in at 69%. Iowa, the state hardest hit by last week’s inland hurricane, was rated at 69% G/E last week, this week 59%, it will be interesting to see if anyone can convert that into a tonnage number.
Iowa (36mac) sows 14m acres of corn, the report says around 43% of crop area was affected, let’s call it 6m acres or corn (some say closer to 7.7m). Iowa’s average yield was expected to be roughly 5.08t/ac, at 69% G/E,  so in theory the state average is probably now going to be closer to 4.31t/ac, so 60.34mt, a 10mt reduction. Just say the area impacted yields 70% of the state average yield, so 6m acres @ 3.55t/ac, that’s till a 9.06mt reduction in state production. If the area impacted and the percentage of the crop impacted is correct than a 10mt reduction may even be a little optimistic. The counties hit hardest are the highest yielding too. NDVI maps will be the key.