Chicago Board of Trade Market News
Outlook: Next Monday’s Crop Progress report could show another slight decline in the percent of total U.S. corn rated as either good or excellent. Historically, changes in conditions start to plateau from about this time period forward. However, this season the crop is lagging in maturity, and only 4 percent was rated mature last week in comparision to a five-year average of 17 percent. Then, WASDE and Crop Production reports will be released on Thursday September 12. In that report, USDA could leave their corn yield estimate unchanged at 154.4 bushels per acre or reduce it slightly, but they are not expected to increase it. A third significant report for the month will be published on September 17, when the Farm Service Agency (FSA) updates their Certified Acreage Data.
FSA’s Certified Acreage Data can be used as an underlying indicator of total corn acreage. Farmers participating in several government programs are required to submit an annual report regarding all cropland use on their farms. The FSA data does not tally to 100 percent of planted acres, but it is heavily relied upon by the National Agricultural Statistics Service (NASS) to estimate total planted acreage. NASS could again reduce their estimate for U.S. corn acreage if the FAS data implies that such an adjustment is warranted.
Lastly, USDA will pubish their quarterly Grain Stocks report on September 30. This data will give a snapshot indication of stocks on September 1 – before the majority of corn grain has been harvested. This season was unique in that the stocks of several commercial elevators were drawn down to the last kernel.
The outlook is that there is unlikely to be any information in the forthcoming reports that will give large speculative traders justification to steadily hammer corn contracts downward as this month progresses. As a result, their strategy will increasingly become one of trying to create negative looking charts to trigger an opportunity to exit their established short positions. Traders may point out that cash basis is weakening, but that is already expected as the market transitions from old to new crop.