By Jamie Martin
Corn futures fell below $4 a bushel midweek, hitting their lowest level in nearly a year before edging back above that mark. The drop comes as traders anticipate higher-than-expected US corn yields in the upcoming USDA August report.
July’s USDA forecast projected a record 181 bushels per acre, but private estimates are even higher. StoneX predicted 188.1 bushels per acre, and some analysts suggest yields could land in the mid-180s. The estimates are based on satellite data and crop ratings, with favorable weather playing a key role.
“The ‘path of least resistance for corn prices is likely sideways to a slow grind lower until late August,’ said Total Farm Marketing analyst Naomi Blohm.“Ample wheat harvests and China avoiding purchases of US crops amid the trade dispute with US President Donald Trump also are heaping pressure on markets.”
In addition, farmer selling is contributing to market pressure. Many producers are moving old crop stocks before harvest or before the September contract’s first notice day. Greg McBride of Allendale explained this influx of grain is causing basis levels to widen.
A national yield above 185 bushels per acre could push production beyond 16 billion bushels, raising ending stocks above 2 billion. Historically, such stock levels could justify prices as low as $3.50 per bushel.
Only about 5% of the new crop is currently priced, leaving an estimated 15 billion bushels uncontracted. This unpriced grain could weigh on markets further as it reaches elevators during harvest.
With strong yields, high stocks, and ongoing trade headwinds, analysts expect corn prices to remain pressured until later in the season, even if short-term rebounds occur.
Photo Credit: gettyimages-dale-fornoff
Categories: National