Corn Future Tests 2011 High On Severe Drought Damage (ZC)

The corn future is testing the 2011 high(s) this morning after corn farms experienced the worst drought since 1956. Let's see if it can take out 800. The corn futures curve is in crazy backwardation.

Corn Future (ZC) - Source: CME Group

The corn ETF will probably test the 2011 high at the open.

Corn Future ETF (CORN) - Source: StockCharts.com

New Data: 2012 Drought Rivals Dust Bowl [w/chart] (The Weather Channel):

"Preliminary data computed from the Palmer Drought Severity Index shows that 54.6 percent of the contiguous 48 states was in drought at the end of June, the highest percentage since December 1956, and the sixth-highest peak percentage on record."

Drought damages corn farms, impact on prices unknown (Lehigh Valley Live)

"Almost a third of the nation’s corn crop is already showing signs of damage, and on Wednesday, the U.S. Department of Agriculture released yet another report predicting that farmers will get only a fraction of the corn anticipated last spring when they planted 96.4 million acres, the most since 1937."

Agricultural Weather and Drought Update – 7/12/12 (USDA Blog)

"On July 11, USDA’s World Agricultural Outlook Board cut the estimate for the 2012 U.S. corn crop by 1.82 billion bushels to “reflect expected impacts of persistent and extreme June and early-July dryness and heat across the central and eastern Corn Belt.” The 12% cut, which left the projected U.S. corn production at 12.97 billion bushels, is a direct result of the nation’s worst drought in a generation—since 1988. Yesterday, Agriculture Secretary Tom Vilsack also announced that more than 1,000 counties across in 26 states would be designated as disaster areas due to the worsening drought."

h/t Business Insider, Sober Look

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