Adjusting the parameters for our cash crop trade going forward was yesterday’s WASDE report. USDA raised both corn and soybean yields along with carry-outs and probably capped the corn trade at that $4.50 to $5 level, with soybean ranges like in the $13 area. American Farm Bureau Economist Betty Resnick says the USDA won’t take another look at yields until January, and the percentage jump in this report was surprising.
“We were facing really potentially desperate situations earlier this summer with drought. They’ve revised yields back up 1.9 bushels to 174.9 bushels nationally, putting us back on track for a record corn crop, so corn’s gotten bigger, we’re going to see loosening supplies with that. And soybeans, similar story, they also saw a bump up in yield to 49.9 bushels an acre.”
With harvest nearing its end here in Iowa and the US, and we know those yield numbers aren’t changing anytime soon, the demand story and South American planting conditions become key.
“As Northern Hemisphere harvest wraps up, of course, all eyes are starting to go south of the equator to see what’s going on in South America and as they start planting again, what that’s going to look like for global supply. But I really think one of the stories of this season in general is corn’s resilience.”
Also adding to the conversation is not just the CME trade levels, but also the on-farm cash price projections, which for corn USDA did lower by ten cents to $4.80 per bushel. Keep in mind that’s a weighted average price, attempting to take into account sales that have already been made by producers.
