Potential market movers were in play going into the last weekend of June.
With the market starting to digest the information within the June 28 USDA Acreage report, analysts were quick to preach caution.
Jerry Gidel of The Price Futures Group said the biggest problem with the report released June 28 is it isn’t going to tell enough. He used the floods of 2008 as a reference point, when much of eastern Iowa was underwater in mid-June. He said the report that came out that year showed the eastern Corn Belt corn plantings increasing, but it didn’t take into account what happened in Iowa, Minnesota and Missouri.
“What we have this year is the reverse,” Gidel said. “Indiana, Illinois and Ohio were in disaster mode in the first 10 days of June, so we have no idea what is going to be planted in those states and what got into this report.”
The USDA plans to resurvey farmers in 14 states in July for the August WASDE report.
Gidel’s colleague at Price Futures Group Jack Scoville also was looking internationally at some of the issues affecting markets, such as trade negotiations and the crops in South America.
President Donald Trump met with Chinese President Xi Jinping at the G20 Summit over the weekend to discuss trade options, but Scoville said there are other trade issues affecting the U.S. right now.
“We are picking fights all over the world,” he said. “The Europeans we are having a trade war with, the Japanese we are trying to start one. We are hurting ourselves in the world market.”
He said the production in Brazil and Argentina, both on the high end of expectations, will be taking business away from the U.S. during these disputes.
These issues limit the outlook for soybeans, Scoville said, but may still allow room for corn prices to see some major gains.
“How high prices can go is based a lot on what our production is going to be,” Scoville said. “If we have a very short corn crop as some are suggesting, prices could go very high — $6 or $7. If we only have moderate losses, then the upside becomes a lot more limited, and we may not successfully trade over $5 per bushel for a very long time in corn.”