Grain prices have been struggling for months. Bearish news of giant corn and soybean crops aren’t helping the market rally. U.S. Farm Report’s Tyne Morgan caught up with Matt Bennett of Bennett Consulting to discuss what it would take to get grains to rally, and it’s not looking too promising.
The corn market is reacting to fears of a giant corn crop. Some reporting agencies are estimating 200 bushel yields in some states. Luckily for prices, Bennett doesn’t think that’s a very accurate number. “Going into the [ProFarmer] crop tour I thought we might shave a few bushels off, but I didn’t realize how much we were going to be disappointed in states like Nebraska,” he said on AgDay TV. “I was there for a day and a half in mostly irrigated fields and we never saw a 200 bushel yield.”
How low will yield averages have to go to rally the market? Bennett thinks a national average of 168.1 bu/acre might be the magic number.
“I don’t think 170.2 [bu/acre] is going to do it,” he said. “The market didn’t bat an eye. We actually went lower.” He says you’ve got to get below 170 bu/acre and closer to 168.1 bu/acre.
“I think if you get down into that area you’re going to rally the market quite a bit,” he said.
Bennett doesn’t think the market will realize the possibility of a smaller crop for quite a few months. “I don’t think it’s going to happen by any means in September, and probably not in October, but maybe by January we’re going to realize that corn crop wasn’t there,” he said.
As far as soybeans go, there isn’t much hope of a rally. While some are worried about sudden death disease in Iowa, Bennett says the soybean crop looks great for now. “Pod counts are phenomenal, the size of the beans is good and pod set is good,” he explained. “Whenever you’ve got good August weather you’ve got to assume that if USDA is coming in the first of the month at 48.9 bu/acre it’s going to be tough to do anything but grow from there.”
Some analysts don’t think a 50 bu/acre national average is a possibility but Bennett begs to differ. “I think Illinois might go 60 [bu/acre], and if you get a big state like Illinois going to 60, 50 bushels is pretty achievable,” he said.