CNS Canada — Traders in corn and soybean futures might well have been hoping for a repeat of history at the start of Thursday’s trading session.

On Aug. 31 last year, corn prices scraped bottom and then rallied, moving from harvest lows.

If they were hoping, they got it. A similar rally dominated Chicago Board of Trade corn and soybean markets on Thursday with September corn rising 12.75 cents, to $3.4275 per bushel (all figures US$).

September soybeans rose 13.25 cents, to $9.3625 per bushel. The more heavily traded November contract gained 12 cents, to US$9.4525 per bushel.

“Our harvest low was a year ago today,” said Steven Georgy, president of Allendale Inc., a market analysis firm, about three hours before markets closed. “So a lot of guys still have that optimism that that’s what we’re going to get today.”

Corn’s rally was the first it has seen in a long while, and according to Georgy, it was long overdue.

There are 2.3 billion bushels of corn carryout contracted at commercial operators, he said, and deliveries can no longer be put off.

That “wall of corn” now has to come to market with the month-end and should help buoy prices for the next week or two as the industry shifts its attention to new crop.

“We feel that corn is undervalued at these levels. It’s kind of like taking a balloon or ball and you’re pushing it underwater — that when you let go of the ball, it comes right back up,” he said. “It comes up to where it ought to be.”

After Aug. 31, he added, the focus shifts to new crop and key factors will be the quality and yield of corn and soybeans now out in fields.

Soybeans developed nicely through August, Georgy said, thanks to timely rainfall during the pivotal mid- to late August development period.

The central influencing factor now for both soybeans and corn is weather.

“There is still the fear that if we do have frost or if we get this cold weather moving downward into any major growing region, it will nip this crop and it will also lower overall average yields,” he said.

Georgy added he expects to see acreage adjustments, possibly in the U.S. Department of Agriculture’s next supply and demand report due out Sept. 12.

Corn area could be cut by as much as one million acres from earlier estimates, he said.

“There needs to be some adjustment. It’s ‘When does the USDA recognize this?'” he said.

Soybean acres may also be adjusted, he added, but they may end up being higher because spring replanting has cast uncertainty into the numbers.

— Terry Fries writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.