Next leg up in soft commodities has begun. Oil and other...

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    Next leg up in soft commodities has begun. Oil and other commodities to take a back seat while food prices now rocket. When corn runs hard almost everything follows ... (eg cotton, sugar)

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    USDA chief: 'A lot of concern' about corn crop

    By PHILIP BRASHER • [email protected] • June 5, 2008


    Washington, D.C. — Agriculture Secretary Ed Schafer said today that he has a "lot of concern" about the nation's weather-battered corn crop.

    A steady succession of storms and cool weather in the Midwest slowed planting this spring and has prevented many farmers from replanting fields where crops failed to come up.

    "We're trying to do everything we can to deal with it. We're monitoring it closely because it is of concern," Schafer told reporters from Rome, where he was attending a summit on the global food crisis.

    Worries about the impact of rising grain prices on livestock producers recently led the Agriculture Department to allow grassland in the federal Conservation Reserve Program to be grazed or cut for hay.
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    Schafer did not say what further the Bush administration might do. The government's options are generally limited. The ethanol usage mandate for refiners could be waived, but economists say that would have a minimal impact on ethanol production because the soaring price of oil would still make it economical to make fuel from corn.

    World grain stocks are tight by historical standard, and U.S. farmers were planning to cut back corn acreage this year and shift more land to soybeans and other crops.

    Analyst Don Roose of U.S. Commodities Inc. said that up to 1.5 million acres of expected corn acreage could be lost to the weather and yields on the rest of the crop could be down.

    "We've seen enough of the picture now," Roose said. Probably, the "acres aren't there and the yield isn't there either."

    Soybeans also are in jeopardy because of the weather, he said.

    At mid-day, the price of corn for July delivery was up 22 cents to $6.36 a bushel on the Chicago Board of Trade. July soybean futures were up 59 cents to $14.48 a bushel.

    Roger Elmore, an Iowa State University agronomist, said the 2 percent of the Iowa corn crop that hadn't been planted as of this week probably won't get planted. Farmers also will have trouble re-seeding fields, he said.

    Corn that is not planted before June 10 typically produces 30 percent less grain than normal, he said.


    http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20080605/BUSINESS01/80605017/1001/NEWS
 
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