While the market spent much of the last week setting up positions for the end of August, it is also watching the start of harvest.
While the harvest has not yet started (except for silage) in many parts of the Midwest, it has started in the South, and the trade is starting to disregard the 174.6 bushels per acre yield estimate issued by the USDA in favor of higher figures, according to Karl Setzer, an analyst with Agrivisor.
Most trade estimates are starting to put the U.S. corn yield at something closer to 177 or even 180 bu./acre, Setzer says.
Meanwhile, about 4% of Brazil’s corn crop has been planted, and the window for exports would appear to be narrowing with each passing week.
What that all means is that the market, while still strong, is becoming a bit less bullish, Setzer says. The corn crop looks to be in decent shape in many parts of the country, and the soybean crop looks good as well. What’s more, demand may be softening just a bit.
None of that means the market is going to nosedive, Setzer says. But it does mean the bull in the market is losing some steam.
For farmers, the numbers still aren’t bad. Cash corn is still in the $5 range and futures prices are in the $5.35 range. Soybean futures are still in the $13 range.
For farmers who don’t have enough on-farm storage for the entire crop, it might not be a bad idea to look at some cash sales this fall, he says. There is not a big incentive to pay storage on grain coming out of the field, Setzer says. And farmers need to look at the market as it stands now, not as it was a few months ago.
“Don’t look back to market,” Setzer says.