MarketsFarm – Traders at the Chicago Board of Trade (CBOT) are positioning themselves ahead of the United States Department of Agriculture’s monthly crop estimates to be released on Aug. 12.
Estimates from private firms and speculation over how accurate they will be compared to the USDA’s are making their mark on the markets.
“I think (soybeans and corn are) going to be pretty volatile until the crop report,” said Terry Reilly, grains analyst for Futures International in Oakbrook Terrace, Ill. “We’re starting to get some private estimates out there that are near USDA’s current yield estimates.”
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Reilly added that excellent crop conditions in the eastern half of the U.S. Corn Belt may offset losses in the western half which has been ravaged by heat and drought. As a result, private estimates may be in line with the USDA’s.
“Therefore, the total U.S. production of beans and corn could theoretically come in a little bit closer to USDA expectations, which would be a little bit bearish because that would suggest we’re going to have a lot of supply…Prices going forward, I would say (there will be) very choppy trade going into the report,” he said.
Wheat is currently experiencing global production concerns, according to Reilly, after estimates for Russia’s wheat crop were downgraded by SovEcon last week.
As for his own estimates, Reilly predicts a “healthy corn yield” of 176 bushels per acre. The USDA predicted last month average yields of 179.5 bu./acre for corn and 50.8 bu./acre for soybeans.
“I expect a decent number, depending on the western Corn Belt yields,” he said, adding it could also depend on the Brazilian corn harvest.
