The USDA issued its World Agricultural Supply and Demand Estimates (WASDE) report Monday, but there was nothing in that report to move the market dramatically up or down.
“The government decided to go on hold with yields,” explains Don Roose, president of U.S. Commodities in West Des Moines.
With drought conditions easing somewhat, the USDA figures were fairly market-neutral, Roose says. The USDA estimates for average corn and soybean prices for the next year dipped a little, from $5.70 to $5.60 for corn and from $13.70 to $13.55 for soybeans. But Roose says there was little in the report to push the market very far up or down.
For farmers, that likely means it will take a weather market or some surprise export news to push prices much higher at the moment. Those things are certainly possible, but they should not form the base of any reasonable marketing plan. Instead, Roose says, farmers likely need to watch the market in the coming months and be ready to sell into temporary rallies.
There are still concerns with the 2021 crop. Corn is tasseling, and the next few weeks will be important for crop development. But as the calendar moves and the crop remains in stable condition, the chances for big rallies will likely fade.
“We’re moving toward a crop,” Roose says.
If there was good news in Monday’s WASDE report it was that there wasn’t any major bad news. There was nothing in the report to push prices dramatically lower or to cause great concern for farmers or traders.
With that in mind, farmers should be looking at fine-tuning their marketing plans for both the near-term with old-crop grain and also for the long-term with new-crop grain.
Roose says the neutral nature of this month’s WASDE report will likely increase interest in the August reports from the USDA, as farmers and traders alike look for some direction.