Corn futures closed lower Wednesday, after trying to push higher early in the session.
Grain futures continue to fluctuate, in an attempt to back off of seasonal lows. Brian Grossman, market strategist with Lakefront Futures & Options, says, “Corn is being the anchor.”
“The biggest thing we’re dealing with in corn is we’re trying to find that seasonal low,” Grossman said. “We’re in the delivery period for the September contract. That comes off the Board the day after WASDE next week. Until we see that happen, I think corn is going to continue searching for the seasonal low. We may have to poke into that lower $3.50/$3.40 area before we finish filling all those technical gaps.”
Grossman further discusses the U.S. Department of Agriculture’s (USDA) upcoming World Agricultural Supply and Demand Estimates (WASDE) report. The report will give a better idea as to where we sit, in regards to acres and yields, according to Grossman.
“The August WASDE took everybody by surprise, with lower acreage (and) higher yield. That has a lot to do with the way the USDA comes up with their report,” Grossman said. “Once we get to the September report, however, they will be using ear weight. I don’t want to say we’re going to have a more accurate estimate because we all know how off it can be, but (it will be) better than what we were using from the previous report because of the physical data.”
Grossman predicts an “interesting” report with the potential for a surprise.
“This drawn out, cool fall is not getting the crop to the finish line, especially if you look up into the Dakotas and Minnesota (where) temperatures are dropping into the mid-40s. We’re two weeks away from the average frost date, so there are reasons to still be concerned about what kind of crop we’ll have,” Grossman said.
Grossman believes producers will harvest a lower than expected yield, which will provide some opportunities heading into the new calendar year. Until then, Grossman encourages farmers to “grin and bear it.”
This article originally appeared on the Iowa Agribusiness Radio Network
