Just what will buyers have to pay to secure a share of waning expectations for
That was one question that the corn market asked itself on Thursday, after the US Department of Agriculture cut its estimate for the domestic harvest, leaving its forecast for US stocks at the close of 2011-12 at 695m bushels.
"The USDA, in a rare move, slashed corn planted and harvested acres, noting delayed planting in the east and northern plains and flooding in the Mississippi and Missouri river valleys," Benson Quinn Commodities said.
Rare because the department has, typically, waited until an end-June acres report to revise sowings estimates.
So bye, bye expectations of a rebuild in domestic inventories this year. They were pegged falling a further 45m bushels, rather than rising 270m bushels as had been expected.
"This report underscores just how tight corn supplies are and will remain for another year," Darrel Good, agricultural economist at the University of Illinois, said.
The same went for expectations for world corn inventories, as the USDA, in its much-watched Wasde report on crop supply and demand, factored in a huge cut to Chinese supplies, and downgraded its forecast for the global number by a massive, humungous 17.2m tonnes.
That's bigger than the figure for shipments this season from Argentina, the world's second-ranked exporter.
"The fact is that we have kicked the can down the road to long in the corn market and have not rationed the tight supply of corn," Darrell Holaday at Country Futures said.
The answer was that "price will go get it done".
"Somebody has to be punished economically in the corn market to reduce use."
And the market tightened the screws (further), sending corn for July to $7.93 a bushel in early deals, the highest ever for a spot contract, before closing at $7.85 ½ a bushel, up 2.9% (and itself a record).
The new crop December lot nearly kept up, gaining 2.5% to $7.14 a bushel, a contract high.
Price will get it done, it seems, even if that means elevating corn to a stiff premium to
(Usually wheat, with its higher protein content, has the upper hand.)
But then, the Wasde was a whole lot less upbeat for wheat, lifting the estimate for world stocks, thanks largely to a "find" in Russia, and raising the forecast for the US harvest a touch too, after upbeat early results from the winter wheat harvest.
OK, not everyone agreed with the USDA's belief in a bigger crop.
"Following the weather problems in Kansas, Texas, Colorado, Nebraska and Oklahoma, this is a pipe dream I think," Matthew Pierce at PitGuru said.
"I will look for reduction in the coming months as the USDA wakes up to this problem."
Still, investors on the Kansas City exchange, where hard red winter wheat is traded, were not taking any chances, sending the July lot 1.6% lower to $8.71 ¼ a bushel.
The oilseed was not even offered help by world numbers either, which showed no major stocks adjustments.
"No real changes to world production numbers leave soybeans in a lurch looking to grains for momentum," Mr Pierce said, forecasting that corn and wheat could "gain dramatically" against the oilseed.
And even wheat did make a little headway compared with soybeans, which for July ended down 0.5% at $13.93 ¾ a bushel.
Still, it was actually
The USDA cut a further 1.0m bales from its estimate for the domestic harvest this year, leaving it at 17.0m bales, with abandonment rates not far off the record 1998 level of 20% thanks to the Texas drought.
Many other soft commodities were firm too, but could not keep up with cotton's performance, even
"With all the crazy weather we are having maybe it makes sense to own some cheap upside calls," Jurgens Bauer at PitGuru said.
"I cannot help but think it not a bad idea to own cheap upside calls just in case the weather situation heats up. Well freezes actually," he said, also noting talk that "growers are not aggressive about selling right now, so prices may improve".
The queue of vessels queuing to load up at Brazilian ports grew a little too, by one to 70, shipping agent Williams Brasil said, speaking of delays in getting hold of the sweetener.
Still, London's August contract ended down 0.3% a $712.10 a tonne, with New York's July raw sugar contract falling 0.4% to 24.84 cents a pound.