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Mid-Session Corn Market Report for 5/20/2008

July corn opened 7 1/4 cents higher on the session at 594 and established an early range of 593 to 603 1/2. The market opened higher and rallied sharply in early trade. Traders indicate that the stronger than expected opening was due to US planting progress that was below trade expectations. Farmers only managed to advance corn planting nationally by 22% through Sunday. Turkey issued a tender today for 140,000 tonnes of corn and 10,000 tonnes of barley. Congress has voted to extend the 54-cent per gallon tariff on imported ethanol for two years as part of the farm bill that it passed last week. This comes over the objections of the President and the Secretary of Agriculture who want the tariff to expire. The President has said that he intends to veto the farm bill, but it passed both houses by large margins that would theoretically be large enough to override a Presidential veto. The US Secretary of Agriculture and the Department's chief economist held press briefing yesterday at which they argued that the growing use of ethanol and other bio-fuels accounts for only 3% of the rise in world food prices. They indicated that the major impetus behind higher prices comes from the soaring cost of fossil fuels. Basis levels at the Gulf are steady this morning.




 
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