There were no fireworks after the release of the monthly USDA crop report on Thursday. USDA announced last week that they would be estimating the impact of the China trade war on demand in this report, throwing the trade a curveball. The report was bullish for corn and wheat. Wheat led the way higher after the report’s release. Corn got a decent bump of 6 cents on the December contract, finishing at 359.25 after what Kokomo Grain’s Mike Silver called a friendly surprise in the report.
“Corn usage in the US and in the world is very good. Ending stocks are declining, and were it not for this tariff war that we have going on between China and the US and other trading partners around the globe, even with the good crop that we have growing out in the field, we should have seen and we should be seeing prices higher than we’re trading now in the futures market.”
To no surprise to Silver, it was a bearish report for soybeans. Beans did finish in the green on Thursday, November’s contract gaining a penny, but Silver says,
“There’s probably some further weakness to come in the soybean market if we don’t get some resolution to this trade war pretty quickly. It is just extremely unfortunate that US farmers and US agriculture is feeling the brunt of this bantering back and forth on this trade war. But it is what it is, unfortunately, and we just have to hope that we can get some resolution here soon so that we can get things back on a more even keel.”
You can hear more of Silver’s analysis, including some potential strategies for old and new crops with these declining prices, by hitting the play button below and listening to the Morning Edition podcast.