You may have noticed fireworks in the commodities markets this week. No, it wasn’t delayed Independence Day celebrations. It was just another USDA report. What was projected to be benign Supply & Demand and Crop Production reports turned out to be shockers, to say the least. Much of the market news this summer has been dominated by the wet start to Eastern Corn Belt corn and soybeans and how tough conditions looked as a result. The Feds didn’t buy into the negativity. Estimated national corn yield was raised 2.0 bushels per acre to 168.8. This was 4.3 bpa higher than the average trade guess heading into the 11:00 report. The estimated national bean yield was increased a relatively mild 0.9 bpa to 46.9 against average estimates of 44.7. Some will argue that conditions improved throughout July making the increased yield projections warranted. Maybe so for corn, but traditional wisdom says beans are made in August, not July. Weather will be a big driver for beans going forward.
At the end of the week, corn lost just $0.08, after trading in a wild $0.44 1/2 range. Soybeans lost $0.47 inside a volatile $0.95 range. For the time being, we will likely trade the numbers as printed, but debate will rage on until we see solid harvest, which is still over a month away.
In the face of all the futures volatility, basis has remained mostly steady. The big carries from old to new crop corn are still present, but shrinking slowly. Soybeans are in high demand and tight supply which has processors paying pushes to keep the pipeline charged.
CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
This Material has been prepared by a sales or trading employee or agent of CHS Rochester and should be considered a solicitation. The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only. There is a risk of loss when trading commodity futures and options. CHS Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.