The guessing game has started. We know we have a corn crop out there, but the big argument is what the yield is.
“It’s unlikely that USDA’s trendline yield is going to be met,” said Dan Zwicker of Zwicker Consulting.
A good rain could put the finishing touches on the corn but the weather maps are indicating rain could be spotty for many areas here in August. USDA will give us their first guesses for both corn and soybeans Aug. 10, which is a surveyed yield.
“Then the trade will kind of argue from there whether or not they went too low or they’re still too high,” Zwicker explained.
From what Zwicker is hearing, the corn crop has been hurt but we don’t know to what extent. To make the corn market more price sensitive to future supplies, the yield probably has to go down to 162 or 163, according to Zwicker. Most of the acreage changes occur in the October report.
Zwicker is staying positive with prices heading into next spring. He believes the balance sheets will tighten and acreage will be taken out of soybeans and put into spring wheat due to high wheat prices this year. With world demand growing, Zwicker expects supplies to shrink.
Zwicker was among the speakers at a recent summer market outlook meeting held at the Vermilion County Farm Bureau in Danville.