As more information is provided on the 2013 crops, the grain markets continue to recede.
As of July 7, USDA estimates 17% of the U.S. corn crop is in excellent condition and 51% is in good condition. That compares to only 6% excellent and 34% excellent for this time period last year. Just 8% of the crop is rated very poor or poor.
For soybeans, 12% of the crop has an excellent condition rating and 55% good. Only 7% of the crop received a very poor or poor rating. Last year, 35% as rated good and 5% excellent for this time period.
With 97.4 million acres of corn planted this year and 77.7 million acres of soybeans, Chip Nellinger, risk management consultant and futures market specialist with Blue Reef Agri-Marketing, says strong prospects for high yields is pressuring markets.
"The market is starting to factor in big yields, since crop conditions are improving," he says. "The market could easily go down. But, as a producer, I think it is too early to panic."
Nellinger says if the market overshoots and factors in too big of a corn crop too early, there may be a chance for the market to rally.
He is more nervous about the soybean market. He says if signs show even a minor yield change (1 to 2 bushels for the national yield), prices could have $2 and $3 swings. "Prices could go down to $10 if the crop comes in higher than expected."
Hear more advice from Nellinger and Indiana Grain Company’s Thomas Grisafi on this segment of Markets Now on U.S. Farm Report.