USDA’s record-high corn yield estimates are causing volatility in the market as the growing season loses its "perfect" label.
Earlier this month, USDA forecasted a record high U.S. average yield of 166 bushels for the 2012-13 marketing year.
That forecast is based on the linear trend of yields from 1990 through 2010 adjusted up by 2 bushels due to the expected positive impact of early planting.
Gregg Hunt, a broker with Archer Financial Services, says the corn acres are coming in this season, no question.
But, with most of the crop barely in the ground, a lot of factors could still bring down the ambitious 166 bu./acre figure.
The phycology of the market changed after USDA released its predicted 166 bu./acre average corn yield, he says.
"Everything needs to be perfect to achieve that type of number. Anything less than perfect is going to cause excitement in the marketplace."
Dry weather in much of the U.S. and other weather issues across the globe are already causing some in the market to doubt that yield level is possible.
"The game right now is no one knows what the size of the crop is. Until we do, it’s going to be volatile."
Listen in as Hunt visits with AgDay’s Al Pell:
For More Information