The slowdown in corn consumption and prospects for larger year-end inventories has resulted in some weakness in price levels, basis, and the September-December futures spread. In mid-June, Darrel Goods says September 2011 futures were still more than $.45 higher than December futures. December futures are now about $.03 higher than September futures. A rapidly maturing crop and prospects for more corn harvested in September has contributed to the weakness in September futures. However, the heat that has pushed the maturity of the crop also raises concerns about yield losses, particularly in those areas that received less than normal precipitation in July.
“While the magnitude of year ending stocks will influence the supply of corn and soybeans for the 2011-12 marketing year, that impact will be dwarfed by the size of the 2011 crops,” Good said. “The extreme variability in planting date and weather conditions to date make it difficult to anticipate crop size. Increasingly, yield expectations are falling below projections in the USDA’s July WASDE report.”