Prepare for drama

摘要

CORN prices rallied this winter when South American heat and drought raised prospects for larger U.S. exports. Shipments improved through the winter, with China coming back to shop as well. But prices ran out of steam as soon as the focus of the Southern drought shifted to soybeans. Oilseed prices were able to surge higher, with the lead contract advancing toward $ 14. Yet corn prices struggled as traders focused on USDA's call for a record crop in 2012. In reality, corn traders are managing two crops with very different dynamics. Failure of South America's corn crop sent China back to our shores, leading traders to begin scrutinizing China's production estimates and USDA's stock estimates. It was enough to create questions in their minds, generating volatility as spring approached. What if USDA overstated this year's old-crop stocks by 200 million, 300 million or more bushels, and China does come back to siphon off any excess bushels reported to be in our bins? Would that leave enough for domestic processors and livestock producers ahead of this year's harvest?