The USDA threw a curve ball at the markets to open September.
In a time when traders are actively trying to gauge demand and sales, the USDA announced there would be no export sales data coming until mid-September. Having unknowns in the market has led to concern from traders, which leads to volatility and price dips.
“We have no idea what export demand has been except for what they put on the daily announcements,” said Jack Scoville, analyst with Price Futures Group. “We don’t like uncertainty especially with uncertain demand. That’s certainly a negative issue.”
Adding to demand uncertainty, markets are keeping an eye on what is rumored to be a record South American soybean crop, continued Chinese lockdowns and a surging U.S. dollar. At the beginning of September, the U.S. dollar hit a 20-year high as inflation continues to be a major national issue.
As the 2022 growing season moves into September, estimates are starting to come in on the upcoming crop.
Based on late-August estimates from the Pro Farmer Tour, the soybean crop looks as if it will be strong in 2022. Farmers will no doubt be happy with higher yields, but that supply is pressuring prices as harvest nears. Corn, on the other hand, is eyeing a somewhat lower yield due to dry conditions throughout much of the Midwest.
“The production expectations for corn aren’t exactly super,” Scoville said.
Iowa’s corn yield estimates are nearly 7 bushels per acre lower than last year at 183.81. The corn crop in Illinois is estimated to be 6 bushels below last year, at 190.71 bushels per acre.
While there is less than a month before many farmers will be picking their fields, current price levels are sure to change in the next week or two.
“We always have different prices at harvest,” Scoville said.
“I expect us maybe to drop a little bit as we get closer, but I don’t know how much. I expect corn to stay relatively firm, but in soybeans the production aspects look a lot better. Those could drop more.”
