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, Illinois.
“Conditions have improved significantly and nobody sees any major problems,” Reilly said.
Trade participants expect corn yields to be up to 180 bushels per acre (BPA) in some regions, 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,” Reilly noted. “That’s driving markets lower.”
The boost in production is also expected to cause large carry-out 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,” Reilly said.
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 increased by over five per cent during the week ended July 24.