Typically, this time of year we see pressure on corn prices and seasonal lows from late August into early September. This has been especially true over the last four years. This year, we are seeing an August rally fueled by uncertainty over production, drier weather, heavy Chinese purchases of U.S. corn, and noncommercial short covering.
Last week’s crop progress report saw corn condition fall more than anticipated, dropping 5 points from 69 percent to 64 percent in the good to excellent category. The market had expected a 2 to 3 percent drop. The damage from the recent derecho remains a question mark and has the market on edge.
Hot, dry conditions across the Grain Belt over the last two weeks are adding to uncertainty. Rains in most areas have been well below average, capping the top end of yield expectations. Corn and soybean crops have been needing rain to avoid further reductions. Hurricane Laura moisture and an expected cold front should bring rainfall to parts of the Corn Belt.