Sorting out the September numbers

By Jon Scheve, Superior Feed Ingredients, LLC

The September USDA report showed corn carryout may end up being one of the tightest since 2012. While the yield estimate dropped to trade expectations, the USDA also decreased the harvested acre estimate by another 1 million. This is nearly equivalent to lowering the national yield by another 2 bushels per acre.

While this is good news for producers, and could mean the tightest carryout in a decade, it does not guarantee the market will eventually trade above $8. Higher prices may restrict global demand. With worldwide recession concern, and the U.S. dollar at a 20-year high, corn usage around the world may ration itself at these price levels.

Seasonally, the market usually pulls back as harvest moves north in late September. Therefore, the market may be range bound for the next 4-6 weeks between $6.50 and $7 until more is known about the actual size of this year’s crop.… Continue reading