After the Sept. 11 USDA reports pushed corn futures up more than 12 cents Friday, analysts are wondering if corn already posted its harvest lows—in August.
“I think it’s very possible,” said Duwayne Bosse of Bolt Marketing, speaking on U.S. Farm Report on Saturday. “A lot of brokers, including myself, think that yield is maybe just a little bit high, so if the yield could come down in further reports, that should make for a friendly report.”
USDA on Friday estimated U.S. farmers will produce 13.6 billion bushels of corn, with an average yield of 167.5 bu. per acre. That’s higher than the trade had predicted, but at the same time, USDA also released numbers showing stronger than expected demand for old-crop and new-crop corn.
“The ending stocks of 1.592 (billion bushels is) sharply lower than we were last year at this time, and we ended up going all the way down to $3.30 for price,” Bosse added. “It’s possible that the August report is the worst report we saw for corn and that we can probably climb up just ever so slightly from here.”
How can farmers take advantage of this rally? Tommy Grisafi of Advance Trading said farmers need to pay attention to local numbers and be ready to move grain if justified.
“We all work with farmers from different parts of the country, so what I’ve noticed is you only get to sell your corn in your backyard,” Grisafi said. “You’ve got to take a look at your cash market (and) assess your own storage situation. Everyone has a different cash-flow need.”
Those localized factors can have a big influence on the market. “A lot of farmers have an incredible amount of space. It’s changing the way the cash market harvests lows. It’s not like the old days,” Grisafi said. “Last year, for example, we had a record crop. We knew we had a record crop. (Yet) we rallied a ton in the month of October.”
Listen to the U.S. Farm Report discussion here:
Will that rally come in September this year? Perhaps, but hopeful farmers also should keep their expectations realistic about the size of that rally, which may be muted.
“Long gone is the (thinking that) ‘we might not grow it,’ ‘Indiana’s flooded,’ ‘Illinois’s flooded,’” Grisafi said. “Iowa—there’s a crop out there. We were never running out of grain. We’re still not running out of grain. … Better times are to come in ag, but right now, we’re just trying to get by.”
Do you think we’ve put in harvest lows in corn? Let us know in the comments.