The USDA’s latest yield projections for 2018 were higher than just about anyone predicted, and the market is still recovering from that surprise.
That, added to an abundant world grain supply and a trade war, is putting downward pressure on the grain market. And it is leaving farmers looking for ways to reduce risk.
“If you have not sold ahead, I would definitely try to get some offers in now,” says Brock Beadle at MaxYield Cooperative in West Bend, Iowa.
But Beadle says one of the potential opportunities for farmers looking to market grain is the possibility the trade disputes presently weighing down the market get resolved. If, for example, the dispute between the United States and Canada regarding the North American Free Trade Agreement were to be resolved, it may lead to a “knee-jerk” positive reaction in the market.
Any such rally would likely be short-lived, but it could offer a brief opportunity to farmers looking to market 2018 corn or soybeans.
There may also be some local marketing opportunities related to weather issues this past growing season.
But Beadle says the recent USDA report was a “big shocker” that was well outside most trade estimates.
For example, it indicated a record large corn yield in Illinois of 214 bushels per acre, 13 bu./acre higher than the previous record. And according to FC Stone, the Illinois crop is maturing 27 percent ahead of average.
The USDA also predicts a record yield for South Dakota and puts the crop maturity at 19 percent ahead of average last week. That is quite a turn-around for a state where planting was delayed this spring.
It will be interesting to watch and see how yields correspond to the predictions, Beadle says. For example, in parts of northern Iowa, he says it is possible that as much as 10 or 15 percent of the corn and soybean acres may have no crop due to a wet spring and summer. That could lower average yields in that area considerably.