Friday, April 18, 2008
Rain continued today over much of the plains states and into Iowa. The importance of this is that prolonged rain that saturates the ground will move the planting season further back. This is turn will probably shift more acres away from corn and into soybeans, which have a more manageable growing season. This may exacerbate the situation created by what the USDA predicts to be a more normal distribution of corn/soybean plantings across the Midwest and could continue to drive up corn prices in the short term. This in turn could challenge ethanol plant profitability for the summer and continue to apply pressure to the industry, resulting in a gradual slowdown in increased production. With a brief break this weekend followed by the possibility of more heavy rain next week, the planting season continues to be pushed back as we creep closer to May.