Corn, Soybeans Jump, Rains Too Late

Most experts who understand the pollination process of corn and soybeans say rains are too late for corn in poor condition, and for soybeans, it's marginal as to how much they will be helped by projected rain in the Midwest of the United States.

Consequently, the price of corn and soybeans reversed direction as the market consumed and understood that rains won't do anything to change corn, and it's not sure how much it'll help soybeans, which have a better change of improving because they pollinate later than corn does.

Once a crop is pollinated, as in the case of corn, nothing can be done to change the yields. All rain can do with corn once it reaches that stage is fill out the existing kernels more.

Corn and soybeans had dropped in price after forecasts for significant rains in the Midwest were recently made. But once the information was understood as to its effects on the crops, prices resumed their climb.

Corn rose another 1 percent on Wednesday, while soybeans got close to a 3 percent boost.

Wheat is being affected by corn and soybeans, but also by the increasing concerns over global supplies.

The projections of yields of corn per acre by the USDA are considered far too optimistic at this time by outside experts, who see corn at tops averaging 130 bushels an acre. It could fall as low as approximately 120 bushels an acre.

What still has to be taken into account is how much more damage will be done to corn that still has a chance to improve with the rains. Will there be enough rain to salvage the crop, or will it fall sporadically and quickly, not allowing for it to soak into the ground. That's the key to helping corn that still has possibilities for improvement. If it doesn't and the drought continues in those areas, it's unknown how badly the average yield per acre for corn will drop to.

But the U.S. drought isn't the only drought story affecting corn. There is also a drought in parts of Russia, Europe and Australia which could end up bringing down the global output for the year, which could continue to support higher corn prices.

The issue there is how many products using corn will experience reduced production because of the higher corn prices. That could pull they other way on corn prices, making it hard to project how high prices will go.

At this time, and with the current data, it appears about $9 a bushel is a good bet, although rapidly changing circumstances could alter that quickly.

Corn for December delivery were up 9.75 cents to finish at $7.88 a bushel and November soybeans rose 46 cents to $16.155 a bushel.