Despite uncertainties of August weather for soybean crops, grain markets “are still in bear market territory,” according to Joe Vaclavik, of Standard Grain, a marketing firm in Chicago.
“We’ve got a bit of a recovery effort … in the grain markets, but really not much has changed,” thanks to favorable forecasts for warmer, wetter weather, he observes.
Markets are bearish on very strong crop ratings, the fourth-best corn and soybean ratings in the last 30 years, he says. Although “this is still a weather market,” with plenty of time for a weather problem in August for soybeans, so far there doesn’t seem to be much concern.
“There is certainly an idea out there that corn and soybean yields may be at trend or potentially above trend, given the crop rating and the conditions that we’ve seen,” Vaclavik says.
On a more positive note, demand for U.S. corn has been very strong, Vaclavik says, and record U.S. corn usage is expected for the upcoming marketing year.
“The problem is we’ve now had multiple years of strong production where we’ve pushed supply to burdensome levels,” he says. "We really need to see a significant production issue here in the U.S. if we’re going to see a long term price restructuring."
Grain markets rose slightly early Wednesday (7/27), with December corn futures up 3 ½ cents, at $3.34, and November soybeans climbing14 ¾ cents to $9.98 ½.