Chicago Board of Trade Market News
Outlook: USDA will publish the August WASDE on Tuesday August 12. There is currently a peculiar dynamic as market participants seem only partially interested in the contents of this report due to the assumption that future USDA data will be even more bearish. It seems a little presumptuous to assume that published yields are destined to get larger and larger and prices will be forced lower and lower. U.S. growing conditions have been excellent and the estimated yield for U.S. corn and other feed grains seem likely to increase in the August WASDE, but USDA will attempt to estimate yields as accurately as possible. The yield estimates will become more accurate as the season progresses, but there is no precedence for the assumption that more accurate yield estimates and higher yield estimates are one in the same.
Argentine corn sales are not expected to become fully active until the value of Argentine peso becomes more certain. In addition, corn sales out of the Black Sea region have the uncomfortable prospect of impending conflict. Nor does it look like burdensome corn crops will be produced in Ukraine and China. As a result of such uncertainties, buyers from Mexico, South Korea, Japan, Central America, and U.S. ethanol producers are chiefly watching the U.S. market and waiting on firm indications that global prices have bottomed. The outlook is that a bottom in U.S. feed grain markets will occur when bearish sentiment applies pressure to corn futures and cash prices independently remain firm. This occurrence can be an important indicator of an impending bottom in prices because negotiations and securing of product often occurs prior to any barrage of export sales announcements.