Commodities are slightly higher across the board this morning as weather forecasts call for drier days in the Midwest and traders begin to even positions ahead of the USDA supply and demand report that will be released next Monday at 11 a.m. Currently, corn is up 2 cents and soybeans are up 10 cents. We continue to see markets re-positioning ahead of the release of the USDA data. Prices are currently bouncing off 10 week lows and we are seeing bargain buying and some short covering. Also, weather forecasts have evolved in the last 24 hours and are now leaning on the drier side which raises some concerns over the drier areas in IA, IL, and northern IN.
The international news agency, Reuters, released an average estimate of what the USDA supply and demand report will entail. The report estimates that corn yield will be reported at 164.9 bu/acre. The estimates ranged anywhere from 161 bu/acre to 167.2. Reuters expects the USDA to say 87.99 million acres of corn was planted with 80.050 million acres actually being harvested. The range of estimates for corn planted area spans 6.3 million acres, ranging from 83.49 to 89.8. The analysts included in Rueters’ pre-report survey believe that planted soybean acres on Monday’s report will range from 78 to 83.5 million acres with the average trade guess at 81.006 million acres. The trade expects the yield to be 47.6 bu/acre. The range of estimates were from 46 to 49 bu/acre.
Awaiting the report, I expect prices to remain range bound and not move too far one way or the other. I believe the only thing that could cause a change in market prices ahead of the report would be a significant change in the weather. Rains are in the forecasts for much of the drier areas, however, in the last 24 hours forecasts have begun to sharply disagree in the placement and coverage of those rainfalls. So confidence in the forecasts remains pretty low. In the short-run, how these rains perform will be a key driver in the markets. I continue to advise producers to put in firm offers with your buyers before the report gets here. By doing so, you give yourself a chance to lock in your crop at a profitable level you deem adequate without having to constantly watch the markets.
Have a great day!