The USDA reports of this past week spooked plenty of people, but analysts caution against letting it rule your crop marketing strategy.
“I think it’s important also to step back and say yeah, it was a shock,” says Chip Nellinger, Blue Reef Agri-Marketing, on the “U.S. Farm Report” Marketing Roundtable. “We were sharply lower. But they have much better information on the September and October reports. They do a little more objective yield counts, weighing actual ears, pod counts. So on the September and October reports, they’re going to be able to zero this in a little bit.
He continues: “I think it’s important to realize we have a long marketing window ahead of us. It doesn’t all have to happen right now, and there’s still lots of questions about final crop size. There’s still time for USDA to adjust it, and it wouldn’t be unheard of for them to go up in August and then come back down if it does dictate out, especially in the eastern Corn Belt, if they’ve got yields too high.”
Farmers should also realize that even if those yield figures change, there is still risk to the downside, adds Justin Kelly, AgYield.
“Even if they drop the yields, which is a possibility for sure, I think the market could still continue lower, especially in the next 30 to 45 days,” Kelly says. “I think the market makeup is one of the most dangerous that I’ve seen with a strong dollar, devaluation, foreign currencies at lows, export demand really bad, everybody’s long. Thirty to 45 days is a really dangerous timeframe to bank on a USDA report.”
Click the play button below to watch the complete roundtable with Nellinger and Kelly.