Corn beans quad graphic

As the calendar turns to August risk premium is starting to slip out of the grain markets, but there is still some discussion about the other side of the scale.

“We’re starting to see some shift toward the demand side,” says Karl Setzer, a market analyst with Agrivisor.

Yields and crop conditions are still important, Setzer says. Many traders think the USDA’s estimated U.S. corn yield of 178.5 bushels per acre is too high. Other guesses are closer to 174 bu./ac. And there is concern about dry crop conditions in some areas. But there is also concern about some of the USDA estimates regarding usage.

Government officials have predicted the 2020 crop will see higher demand figures. The last figures available estimate corn usage for feed demand to rise by 250 million bushels. They peg an increase in ethanol usage at 350 million bushels. And they put exports at 375 million metric tons higher.

The feed number is pretty realistic, Setzer says. The ethanol figure appears to be overly optimistic. He describes the export estimate as “totally possible but it’s probably going to be a stretch.”

Those three totals add up to nearly a billion bushels. The trade is skeptical.

With those things in mind, Setzer says farmers need to be aware of the situation. For those who still have old-crop grain to market before harvest, the time frame is growing short. With soybeans hovering near the $9 mark, this isn’t a bad time to market some old-crop grain. And crop insurance is a tool that needs to be considered with old-crop marketing plans.

That crop insurance support might not be as strong in 2021. Right now, Setzer says, farmers need to be pro-active and consider whether they should be selling some new crop grain. Either way, he says, the weather will have a big say over market moves in the next few weeks.

And farmers need to be aware of that weather factor when making late-season marketing moves. They may also want to pay attention to see if the USDA usage estimates change in the coming months.

Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.