This is the Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.

The corn and soybean markets drifted lower as we got to first notice day on the September contracts yesterday, Thursday Aug 31st. It has felt like fund positioning ahead of first notice day rather than a new trend lower. Corn seasonals turn positive into the first of September while soybeans historically put their low in a bit later, typically October or November. The condition rating drop this week was not enough to spark any major buying. The weather forecasts remain bullish as the growing season finishes with another high pressure system complete with temperatures well above seasonals and no sign of rain for much of the growing regions. The market is looking for more concrete evidence of yield loss. Pro Farmer painted a more bullish picture and that was followed by another well followed analyst, Crop consultant Dr. Michael Cordonnier who dropped his production estimates similarly to Pro Farmer citing the hot and dry finish to the growing season. There is growing consensus that USDA will raise planted acreage for corn and possibly soybeans on the next update, Sept 12th, based on FSA data. Both ProFarmer and Cordonnier also raised their corn acreage but that was more than offset by the loss in yield. USDA will include field collected data in addition to the satellite data and farmer surveys to arrive at their production estimates on the September report. 

There is a big expectation from the market that USDA will lower production on the Sept report, but what they do with demand will be a big question. Ethanol grind was disappointing this week but ethanol stocks are at the lowest level in almost a year illustrating strong demand so the drop in grind may be a lack of corn availability for plants as we approach the new crop. With the hot dry finish to the growing season, there will be new crop corn available early. New crop exports have been encouraging recently in both corn and beans as well. 

I look for the corn and bean markets to continue to drift without much conviction as we get closer to the Sept crop report. I look for the lows to hold but there is a lot of hedging/selling pressure at $5 on Dec corn and $14 Nov beans so we need to get something significant to spark a move above those levels. We will be looking for harvest reports soon and hope to get more encouraging information on demand. Market will also watch for updates from condition ratings that will be released Tuesday of next week. 

The markets will not open Sunday night as normal and are closed Monday for the day session on Labor Day. They do open Monday night at 8pm.