Pork producers relieved by corn improvement

08-08-2008 | |
Pork producers relieved by corn improvement

Pork producers can breathe a sigh of relief as corn prices are beginning to drop following contract highs in June and early July amid crop concerns as a result of spring flooding.

After reaching a high of nearly $8 per bushel, December 2008 corn futures are now trading around $5.60.

Falling prices
The falling prices are due to several factors such as lower oil prices, shrinking ethanol margins, slowing corn exports, increased wheat feeding and at least some signs of reductions in the swine herd.

However, the biggest factors are the improvement in crop conditions and hopes of a larger crop than previously expected. On July 27, 66 percent of the crop was rated in good or excellent condition compared to only 58 percent on the same date last year.

Key data
USDA’s August Crop Production report will provide key data on planted corn and soybean acres and a more up-to-date grain harvest forecast. National Agricultural Statistics Service re-interviewed 9,000 farmers in mid-July to try to get a more accurate picture of actual plantings and acreage intended for harvest.

That information will be incorporated into the August production forecasts; however, such data are subject to revision as the growing season unfolds.

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