Corn is down 3 and soybeans are down 8 overnight as traders look to short the market heading into a weekend that is forecasted to be cooler and wetter.
The EU and US models may disagree a little bit on amounts, but both are very wet for the Central US this morning. A string of thunderstorms is forecast to move through lower Iowa and Northern Illinois in the middle of next week. A cold front out West is activating the weather pattern to wetter. The confidence this these forecasts look high to me.
Some crops have been helped this past 10 days as rain arrived in the Midwest. What would have been headed for a disaster has been salvaged now in many areas. A record yield is off the table, but the question will remain, just how much smaller the crop is. The absence of heat has helped hold things together awaiting timely rains. The futures have not held together very well in corn futures as prices are at summer lows trading both sides of 5 dollars in December corn.
There are still a lot of things to be determined about the size of this year’s crop, but I believe we are trading a 173-175 range yield at the present time. Unless demand picks up next year, we could drop yield to 168 and still have the same carryout as this year. So, there is currently no reason for this market to trade higher until demand comes back.
Have a Safe Day!