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SUE MARTIN COLUMN: Weather is key factor in soy, corn markets

Good news! The House of Representatives voted July 31 to not pass the Commodity Markets Transparency and Accountability Act of 2008. The passing of such a bill would have reduced participation in the energy futures markets, created onerous new re...

Good news! The House of Representatives voted July 31 to not pass the Commodity Markets Transparency and Accountability Act of 2008. The passing of such a bill would have reduced participation in the energy futures markets, created onerous new regulatory burdens on our industry and driven a major portion of energy futures trading out of the US. With 151 members voting against the bill, a two-thirds majority was not able to be achieved.

Congress will take another look at this legislation in the fall with the high level of gas prices.

Hog futures staged a good rally along with cattle futures July 31. Ham exports have been phenomenal this summer, with exports (because of a cheap dollar) going to China, Mexico and Russia. Russia has been a major buyer of hams from the US. Hog values can remain positive into the middle of August as state fairs finish. Usually from there, numbers pick up and prices decline with too much supply for the killing capacity. This year, the supply should be huge. Therefore, I suspect that we see a traditional fall decline into November.

Weekly export data show that beef exports for the past week were the largest since the week of Nov. 20, 2003. South Korea held 45 percent of the share of exports. Now that it appears that exports are going smoothly to South Korea, Japan&aposs market should be next to step up and then Mexico.

Feeder cattle experienced a sharp rally July 29 through 31. In fact, January feeders now stand only $2.05 from the all-time high of $117.90, made in December 2005.

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Weather is becoming an important factor for the soybean and corn futures. That&aposs normal for this time of year, but should the weather turn hot in August, markets should feel the need to improve prices. I hear in many areas (Minnesota, northwest Iowa and southeast Nebraska) that the corn crop looks the best ever. Other areas report that the crop looks good but is just behind. Still, pump some heat at this crop for more than just a few days and we may start to hear otherwise. However, it is the soybean crop that remains a concern. I tend to be quite friendly toward soybeans as the carry-out is tight and, we need to stoke the South American farmer to raise more soybeans. A July 31 news article indicated that the secretary of Argentine Agriculture is looking at a new tax scheme that would raise export taxes on soybeans to 40 percent, up from 35 percent, and reduce the export taxes on corn and wheat to 20 percent and 23 percent, down from 25 percent and 28 percent, respectively. Supposedly, Argentine planting of soybeans has been growing and the government is interested in encouraging more acres of corn and wheat. In Argentina, it is the soy products that are exported more so than the soybeans themselves. Unfortunately, the weather continues to provide hot and dry conditions, making the prospect of planting more wheat very uninviting.

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