Corn Has Demand Surprise as Summer Growing Begins - ( MOS looks cheap)

With minimal expectations of any sizable changes in this month’s crop and supply/demand revisions, the
USDA threw a curve at the markets when it substantially increased corn’s old-crop ethanol demand outlook in this week’s updates. The latest soybean and wheat adjustments were relatively modest in comparison.
Instead of waiting to see the next quarterly stocks report later this month to make changes in corn’s domestic
demand level, the USDA boosted corn’s old-crop ethanol by 150 million bu. to 4.55 billion based upon ethanol’s strong March output (released in late May) and the seasonal tendency to average this level or more in the second half of crop year in the past. They did cut corn’s feed demand by 25 million, but upped this feedgrain’s food demand by 10 million resulting in 135 million drop in 2009/10’s stocks to 1.6 billion.

My feeling is that Corn might surprise us with a counter-seasonal rally; Chinese demand is another factor that we should take into consideration.

In our equity portfolio Mosaic (MOS) our fertilizer company looks really cheap at the moment....