USDA Report Shocker!
Corn was doing quite well last week until the August USDA Supply Demand Report. The USDA surprised traders with a yield estimate for this years corn crop of 169.5 bushels an acre. The average trade guess was around 166, with many estimates around 160 bushels an acre. That took corn down about 15 cents a bushel. Looking at the crop condition ratings, record demand for seed to replant, and the drought monitor farmers cannot understand how the USDA came up with such a high yield estimate?
It was the same story from the USDA with the bean yield estimate. Traders expected the USDA to lower the bean yield around a bushel an acre but instead the USDA raised the estimate a bushel and a half to 49.5 bushels an acre! That took beans down 45 cents a bushel. Just like corn farmers are trying to figure out how the USDA came up with that estimate?
You can make a very good argument that the USDA is overestimating this year's corn and bean crop. Unfortunately, the "market" pays attention to and trades the USDA numbers. I learned a long time ago the "market" or the USDA do not care what I think.