Grain Marketing Highlights – August 24, 2012

Carl German, Extension Crops Marketing Specialist;

Volatile Markets Remain Long Term Bullish
The corn market has made an attempt to take out the August 10 new crop Dec ‘12 futures contract high of $8.49 this week, currently trading at $8.37 per bushel. The soybean new crop Nov ‘12 futures market contract achieved a new high on August 21, trading at $17.28 per bushel on Wednesday morning, August 22. These markets have bid higher for several reasons, among them, supplies will be short for both new crop corn and soybeans and while it is believed that U.S. corn demand can be cut enough to keep corn from running out before the end of the ‘12/‘13 marketing year the same may not hold true for soybeans due to a short 2012 Southern Hemisphere crop combined with a short 2012 U.S. soybean crop. The SRW wheat market has also been making a run toward taking out the recent life-of-contract high for the July ‘13 SRW wheat futures contract of $8.68 achieved on August 10, currently trading at $8.61 per bushel. The wheat market has benefitted from a slackening in the value of the dollar and production problems in several wheat producing regions/countries throughout the world e.g., Russia, Ukraine, Black Sea Region, and Australia.

Meanwhile, unless the Pro Farmer Crop Tour being conducted this week produces more dismal reports concerning potential 2012 U.S. corn and soybean yields these markets could remain in a sideways trading pattern until the September 12 USDA Supply and Demand report is issued based upon the idea that lower production numbers are already bid into the market. My gut feeling is that those that think the worst news from the tour came in on Monday, August 20 just need to wait until Illinois, Indiana, and Iowa yield reports come in from the tour results. Nebraska corn yield results reported last evening were in line with USDA’s August S&D report. Note: Nebraska has thousands of acres of irrigated corn, the three “I” states of the Corn Belt do not irrigate much corn. Yield reports from the states of IL, IN, and IA are likely to feed the bull in this market.

For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.