Glacier FarmMedia | MarketsFarm — As the rest of July plays out, United States soybeans and corn will remain in a weather market, said Sean Lusk, vice-president of Walsh Commodity Hedging Services in Chicago.
For corn in particular, the recent weather across most of the Corn Belt has been “greenhouse type conditions, very warm and very wet,” Lusk said.
With that, he suggested that come harvest U.S. corn yields could reach 184 bushels per acre, especially with the U.S. Department of Agriculture rating the crop at 74 per cent good to excellent condition.
Read Also
U.S. livestock: CME cattle futures hit new contract highs as supplies tighten
Chicago Mercantile Exchange live and feeder cattle futures rallied to fresh contract highs on Wednesday, as tight supplies and strong cash market prices continued to send future contracts surging, market analysts said.
“Anything 70 and above is considered close to a bumper,” said Lusk.
Should that materialize, he projected the carryover for corn could reach two billion bushels.
However, Lusk also pointed to what happened this time last year when conditions were very good, but the hot and dry August weather took a toll on U.S. corn.
“The market remembers last year, when we had very good ratings and corn (ending)stocks were thought to be 2.1 billion to 2.2 billion. That was whittled down to 1.9 billion and to the 1.6 billion where we are currently,” he said.
As for soybeans, Lusk said August will decide that crop’s fate. If next month is again hot and dry, that could erode yields. However, he said soil moisture levels are good right now, which will help soybeans, as well as corn, tolerate any dryness.
“It’s a weather game now,” he said.
Despite the Trump administration announcing a flurry of trade deals on July 22, with more to come, Lusk said they’ve had very little effect on the markets as almost no details have yet to be released.
Added to that there are almost no major geopolitical issues influencing corn and soybean prices.
“The market is in the doldrums,” Lusk said.
He warned that if November soybeans fall below US$10 per bushel, then that would likely pull December corn under US$4/bu.
