FX.co ★ Corn review for August 15, 2011

Futures on corn closed with a gain on Monday amid concerns over fewer supplies later this year. December contract reached its new record highs.
Traders carry on purchasing futures after the US Agriculture Department unexpectedly downgraded forecasts on grain crop yield last week. Thus, the national government forecasts that corn production will drop by 1.4% to 12.914 bln. bushels owing to the continuous drought that damaged the crops considerably.
The market reflects this news and opinions that corn harvest will shrink further by August 2012 in quotations. Still traders attempt to find levels which would help to push demand down.
Uncertainties over the US crops condition have been supporting the market, as at the moment it is rather sensitive to news about crop yield and weather. Traders have also been concerned about further downgrading of the official assessments of the grain crop condition.
Nevertheless, on Monday futures on corn failed to remain at their record highs amid favourable weather conditions in August and concerns over the global economic situation.
By the end of CBOT trades December futures on corn grew by 5 ½ cent (0.8%) and equaled USD 7.20 per bushel.