MarketsFarm – The Chicago Board of Trade (CBOT) continues to watch growing conditions in key regions of the United States, as record yields are expected for corn crops.
“Corn is pretty much made,” said Terry Reilly of Futures International in Chicago, Ill.
“Conditions have improved significantly, and nobody sees any major problems.”
Trade participants expect corn yields to be up to 180 bushels per acre (BPA) in some regions, which is higher than expected. Soybean yields are also expected to outperform initial estimates, totalling 52 BPA in some areas.
“We’re staring down two large crops,” remarked Reilly. “That’s driving markets lower.”
The boost in production is also expected to cause large carryout into 2021.
Last week, the United States Department of Agriculture reported 10 consecutive days of soybean sales to China.
“That was very supportive for the bean market,” commented Reilly.
Reilly expected the November soybean contract to hit support levels around US$8.75 per bushel. The December corn contract is expected to test contract lows around US$3.22 per bushel.
According to a recent report from the Energy Information Administration (EIA), ethanol production has been steadily increasing, which has provided some support to corn prices. Ethanol production increase by over five per cent during the week ended July 24.