After what turned out to be a rough day for corn and soybean futures yesterday (both were down double digits), our markets rallied back a bit overnight, without much for headline news to go off of. The crop progress report was out yesterday afternoon and corn conditions declined, which some say is the reason for the firm markets last night.
To me, though, the trade should be paying less attention to ratings (seasonally they go down this time of year anyways) and a little more attention to the maturity/timing. The report showed that 74% of the corn crop is dented (5 year average is 69%), 21% of the corn crop is “mature” (5 year average is 19%), and 18% of the soybean crop is “dropping leaves” (5 year average is 15%). So, harvest is coming, and it appears to be on schedule.
The big question today of course involves just how big this harvest will be, with yield and acres both in question. This Friday at 11 a.m., the USDA will give us fresh data and the corn conversation appears to be getting the most attention. According to Reuters, the average trade guess is showing an increase in corn acres of about 600k acres from the prior estimate, along with an increase in corn yield of about 1 bpa, up to 175.8 bpa from 174.6 bpa last month. Knowing this crop increase is already in the minds of the trade, the explains some of the weakness we have seen over the past few weeks. Friday will reset everyone’s thoughts and we will go from there.
Corn is 2 to 4 cents higher
Soybeans are 7 to 10 cents higher