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Latest WASDE tightens lid on prices even more

A market analyst says the latest WASDE report tightens the lid on corn and soybean prices even more.

Steve Hyde with CHS Hedging tells Brownfield Thursday’s USDA production estimates were devoid of positivity.

“USDA raised corn yield by four bushels per acre if you round it off.  Beans were unchanged.  Production is up a little bit, particularly on corn.  Big world stock numbers.”

He says strong export demand has helped underpin the market, especially for soybeans.

Hyde suggests a more bearish outlook for corn futures because of the higher production forecast.

“Some of the things we’ve been talking about with producers, particularly on corn because a lot of corn has been stored the last couple of years, is if we get any type of rally at all.  And we’re talking ten to fifteen cents, that’s a big rally these days unfortunately.”

Hyde recommends producers manage risk using options strategies like buying calls and taking advantage of carries in the market.

USDA now estimates a national average corn yield of 175.4, which would be a new record. While the soybean yield estimate of 49.5 would not be a record, the anticipated production of 4.4 billion bushels would be.