Glacier FarmMedia — Expectations for a record large corn harvest in the United States this year are overhanging the futures market, which should keep values under pressure through the harvest season.
“We have a lot of corn out there … so the consensus is that prices will continue to grind lower going forward,” said Terry Reilly, senior agricultural strategist with Marex in Chicago.
The U.S. Department of Agriculture raised its call on average corn yields to a record high of 188.8 bushels per acre on Aug. 12, with the data also including a surprise increase to seeded area. Soybean yields this year were also forecast to be at a record large level in the report, but area was revised lower and the agency’s smaller production estimate for the crop was supportive for prices. Tighter carryout projections for soybeans also underpinned the soy market, said Reilly.
Read Also
U.S. livestock: Cattle make small gains, hogs slip back
Most Chicago cattle futures settled with small gains after trading near highs earlier on Wednesday. Lean hogs closed slightly down.
However, he expected soybeans would also face pressure through the harvest season but would lag corn to the downside — causing the corn/bean ratio to widen.
From a chart standpoint, Reilly placed November soybeans in a range from US$9.60 to US$11.75 per bushel range “with the bias to the lower end.” He said a break below US$10 was likely in the coming weeks. The contract settled at US$10.4425 per bushel on Aug. 13.
For corn “I think we could lose another five to 10 cents in the December contract,” said Reilly. He placed support at US$3.80 but expected that support would be breached during the harvest season. December corn closed at US$3.9725 per bushel on Aug. 13.
He placed December wheat in a range of US$5.05 to US$5.35 per bushel, with that contract closing at US$5.2825 on Aug. 13.
Beyond the underlying fundamentals, Reilly added that policy headlines on tariffs and trade will also continue to move markets on a day-to-day basis in the weeks ahead.
