Weather Driving US Corn Crop Quality Down

The weather continues to be the story for crops across the world, as the U.S. continues to be hit by hot, dry weather for the last couple of weeks, raising questions as to where it'll be at harvest.

Weather patterns aren't expected to change any time soon either, as the outlook is for the same weather conditions to continue.

Quality is the highest concern, as bad weather could lower the level of starch the plants send to the kernal.

Corn futures for December delivery increased 2 cents, or 0.5 percent, to finish at $4.20 a bushel in Chicago, ending the week at a gain of 3.3 percent.

On Thursday corn reached its highest levels since June 15, 2009, going as high as $4.39 on the most-active contract.

The USDA said this week the amount of corn planted this year is lower than projected.

Are China's Corn Imports Short- or Long-Term?

For the first time in well over a decade, China has acquired large quantities of corn from U.S. farmers, importing close to 1.2 million metric tons.

Every time something like this happens, the media catches it and offer the possible narrative of a new age arriving for corn and other grain exports.

There will be only one way to find out, and that is time. China is close-mouthed about the circumstances surrounding the unusual actions they've taken, and part of that is for obvious competitive reasons, but also political ones.

Although China hasn't experienced near the extent of droughts Russia has in relationship to wheat, it has still had a number of them in the nation, which has apparently caused them to be short this year.

The other scenario is whether or not the Chinese population, which is growing wealthier, is increasing its demand for corn through its acquisition of meat.

One final element could be concern over the response of its people if they find out there is a shortage of corn. A couple of years ago riots broke out over higher food prices, and panics are easy to start if people begin to think they may not get food at all.

The official word from Beijing is the imports are based on higher domestic corn prices, adding the grain reserves in the country are enough for the people.