With the fall crop growing season under way, grain-based foods buyers once again face a potentially perilous and even incendiary market situation. Through May 17, corn planting was well behind normal, dramatically so in a few key states. Standing out was Illinois planting, which was 20% completed versus 90% as the five-year average for the date. Progress in Indiana lagged nearly as much. Considerable progress was made in recent days, but the delays have caused concerns.

These problems, together with trouble areas for spring wheat and a tight soybean carryover, have triggered early strength during a time of year always prone to volatility about crop prospects. Further, these price gains come against a backdrop of a gradual resurgence in commodity prices generally, with crude oil prices up significantly from recent lows.

Bakery flour buyers pursued widely varying strategies. A significant number of buyers had taken forward coverage earlier, and a small number have booked more recently, to insulate themselves from market vagaries. Others, though, are holding out, focusing principally on the current carryover forecast more than twice as large as the carry-in. The importance of this indicator certainly should not be discounted, but buyers also ought not to be paralyzed by an unwillingness to consider that the horrendous market conditions encountered in 2007-08 could be repeated. They could.