Corn, Soybean Rally Faces Test in September

A strong rally in corn and soybean futures has continued into August, fueled by concerns over potential record US crop yields. However, traders are now wondering if this trend will continue into September or if prices will correct lower.

September is a crucial month for market fundamentals, with several key reports and data releases that could impact price movements. Among these, the USDA's World Agricultural Supply and Demand Estimates (WASDE) report on September 11 is particularly important.

Traders are closely watching yield estimates for corn and soybeans, as well as demand projections. The current market pricing suggests a corn yield of around 175 bushels per acre, lower than the USDA's current estimate of 180.7 bushels per acre. Soybean yields are also in question, with the USDA pegging them at 52.7 bushels per acre.

Meanwhile, demand for US corn and soybeans remains robust, driven by strong ethanol and feed markets. However, traders are concerned about potential corrections if managed money funds continue to add to their long positions, which could lead to swift liquidation if prices get bearish news.