The world market may receive more corn than thought, this production year. Brazilian farmers have double-cropped enough land to raise their second corn crop by 7 million metric tons from a year ago. This is an additional 275 million bushels for the global market.

Given current price spreads, it is quite possible this corn will make its way into the Asian market and possibly to China.

Trade may be surprised to find out how many actual acres of corn and soybeans were planted in the United States this year. Initial projections had corn losing roughly 2 million acres to soybeans because of elevated values.

The actual amount that shifts may be much less, however, according to soybean seed sales reports. In fact, some seed dealers in the Eastern Corn Belt are selling their soybean seeds as commercial grain due to a lack of demand.

Weather conditions across the Corn Belt have been mostly favorable this planting season. Current weather models indicate these could last well into the growing season, especially if patterns shift into an El Nino.

This is similar to what happened in both 1994 and 2004, which led to above-trend corn yields. If we would see conditions repeated this year, historic trends indicate we could see corn yields from 180-187 bushels per acre. While this seems unrealistic, we need to be aware of the possibility.

Others weather forecasters such as NASA do not agree with this, as their models show neutral weather conditions for the next several months. Groups such as this claim even if an El Nino were to develop, it would not be strong enough to impact U.S. grain production.

More grain and soybeans are starting to exit the United States through the Pacific Northwest. This has pushed basis levels in that region to record levels, as terminals try to secure enough inventory for vessel loading.

The main reason for the growth in exports from these terminals is that it takes less time for vessels to reach the Asian market than from the gulf. Even as much as one less day in transit can have a huge impact on what a buyer is willing to pay for a commodity.

Trade continues to debate the impact this year’s rapid corn planting pace will have on this fall’s grain supply. Many believe early planting will lead to an early harvest.

This is very likely, but the real benefit for the corn complex may be the possibility of the crop missing a late summer weather threat. It is quite possible much of the crop will be beyond the stages where weather can significantly reduce yields by the time it would normally develop.

Wheat feeding has been on a steady increase over the past year, but may do so at a more rapid pace in the future. Feed wheat is being used in more rations, and at heavier volumes.

Much of this stems from economics, but increased encouragement from livestock nutritionists will also elevate the usage. It is quite possible this could cause even further declines to corn use in future supply and demand reports.

We are starting to see more corn movement across the Corn Belt. This is from the fact the developing crop looks good, and does not have any foreseeable stress coming toward it. Once a crop reaches this stage, farmers tend to feel more comfortable with rotating their inventory and making room for harvest. The better the crop looks and the bigger the yield potential, the more corn – and eventually, soybeans will move into commercial storage.

Karl Setzer is a commodity trading advisor/market analyst at Maxyield cooperative.

His commentary and market analysis is available daily on radio, in newsprint and on the Internet at www.maxyield cooperative.com

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources believed to be accurate.

This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.