Our markets once again faded lower overnight, although this time it was a little easier to stomach with both corn and soybean futures showing relatively small losses as the market continues to bounce around near recent two-month lows, set back in July.
In fundamental news, the USDA announced yesterday that as part of their S&D report (to be released next Friday) they will also be reviewing the acreage piece of the equation (both planted acres and harvest acres), which normally doesn’t happen until October. The general feel in the market is that they could be increasing corn acres by as many as 1.0 million acres and there may be a small increase in soybean acres as well. If you recall, when the planted acreage report was released back on June 30th, the corn market locked limit higher with the surprisingly low number of acres planted. Are they planning to re-adjust? This gives the report next Friday an extra twist and no doubt has the bulls in the room a little nervous.
The market is still waiting for more news on the extent of the damage down in the U.S. Gulf as many major exporters have yet to report their damage. I’m sure they are still trying to figure out what is going on and with no power still across the area, that has to be pretty difficult. A long stretch (75 miles) of the Mississippi River is still closed to vessel traffic thanks to sunken vessels, scattered barges, and downed power lines. This story, of course, is important to the market as we try to figure out what this will do to our export program. Some point to the fact that when Katrina hit in 2005 there was a noticeable drop from trend in U.S. soybean exports. The question is, will that happen again, and if so, by how much? In my opinion, this uncertainty/risk is very much tied to our recent slide in futures prices.
Corn is steady to 2c lower
Soybeans are mixed, 1c higher to 1c lower