Full U.S. harvest picture not clear, yet
A market analyst says early harvest results for U.S. corn and soybeans aren’t great and the grain markets could respond higher if results worsen.
Arlan Suderman with StoneX Group says he is expecting a clearer picture on the U.S. crop in October and will continue to track crop conditions.
“My yield models that are unofficial estimates are at 171 bushels/acre for corn and 50 bushels/acre for soybeans,” he says. “If you take that corn estimate and use USDA’s demand estimates, that would leave ending stocks almost 400 million bushels above year-ago levels.”
Suderman says he’s not too excited about the corn market reacting higher to that news unless yields drop well below 170 bushels/acre, but soybeans have a tighter balance sheet.
“If we start dropping below that 50 bushel level for soybeans, I think we start seeing ending stocks closer to 200 million bushels and USDA’s already lowered its demand estimates for soybeans. Then, I think the market responds a bit more.”
Suderman says all eyes are on USDA’s next yield projections, with an expectation the agency will lower yields for the third consecutive month. USDA’s next set of supply and demand estimates is out October 12.