While there is some corn lost in the Iowa floods, certainly, the early indications are that it is not enough to create massive shortages of the commodity. Some is lost every year between the pre-crop predictions and the grain bin, due to drought, hail and pestilence. A loss factor is figured in to the early estimates, and counted on by the commodity futures traders.
A disaster such as the Iowa floods may be used as an excuse for a day or two by futures traders seeking market volatility to generate a few more commissions, but over the whole season, it will just be another blip on the radar.
Some corn hadn't been planted yet, some can be replanted and other corn benefitted from the rains but missed the floods, so most observers think it will average out for the season. The real serious damage is in the cities, such as Cedar Rapids and Des Moines, where some 38,000 people have been displaced, and rivers haven't fully crested yet. The muck and disease-spreading filth will take a while to clean up in the cities, and will gather all the publicity.
Corn prices have gone through the roof, well over $7 a bushel, but are already starting to back off, as panic subsides and traders realizie they may well have overdone it.
Of course the floods are a natural disaster, the magnitude of which we wouldn't want to minimize. But perspective teaches us that a lot of the grief had already been built into the system. The grain market will adjust.
No comments:
Post a Comment