Market analyst “cautiously optimistic” about September WASDE

by | Sep 8, 2020 | 5 Ag Stories, News

U.S. Department of Agriculture officials will soon release their September World Agricultural Supply and Demand Estimates (WASDE) report. A market analyst urges farmers to remain “cautious” ahead of Friday’s report.

Allendale, Inc. expects lower corn and soybean yields, following some “monstrous numbers” published in last month’s report, shares Greg McBride, commodities broker with Allendale, Inc.

“I would look for yield numbers to come down on this report,” McBride says. “I don’t think it’s as bad as what a lot of people were trying to price in when we got the derecho and bout of extreme dryness across the Midwest. It (yield) will come down to about record levels for beans and back down to trend for corn.”

McBride encourages producers to stay “cautiously optimistic,” as he fears we may be “a little overpriced” heading into this report.

“Because we’ve priced in a big drop with a good demand clip, we may be a little bit overpriced going into this report, which could lead us to see a setback. But if that demand continues to stay strong, we could use that setback as a buying opportunity. If we continue to see prices stick in the areas they’re at, it might be worth it to look at making some cash sales off the farm before harvest or out of the bins with what’s left,” McBride says.

Analysts will also closely watch macro markets, and rhetoric about decoupling from China, says McBride.

“We’re seeing oil slip back. The equities – the Dow, S&P – continue to back off a little bit. There’s uncertainty in the tech sector (and) concerns about oil and energy demand as we move forward into the ‘off season’ for those markets. Then you see the dollar start to strengthen up. All of those things can put a little pressure on the Ag markets,” McBride says.