FX.co ★ Corn review for August 1, 2011

Futures on corn closed with abrupt gain on Monday amid concerns over the harvest condition due to a continuous drought in the US Middle West. By the end of CBOT trades December futures on corn grew by 17 cent (2.5%) up to 6.85 ¾ dollars per bushel.
In the beginning of this week traders bought futures on corn as market concerns over the condition of autumn harvest exacerbated owing to a continuous harsh drought in the US Middle East in July. It resulted in expectations of lower US Agriculture Department forecasts regarding grain reserves.
Traders keep on monitoring the weather conditions as farmers are expected to have good crops this year in order to prevent the supply crisis. Grain reserves have been at their 15-year highs in the USA. Meanwhile, demand for corn has been strong which puts more pressure upon the reserves. It causes market participants concerns.
Last month corn prices grew up to their all-time highs, yet they have declined since then by 15%. However, traders have been confused amid uncertainties over the harvest condition. Some analysts predict that the US Agriculture Department will downgrade its corn forecast to 150 bushels per acre from 152.7 bushels per acre.