Corn Strangle Ahead of WASDE Data Release

Sean Lusk, Vice President of Commercial Hedging at Walsh Trading, is advising traders to consider a strangle in corn prices ahead of tomorrow's WASDE production data release. According to Lusk, trade expectations are for more soybeans and fewer corn acres, but there may be surprises.

The USDA will release actual FSA numbers, which have been known to contain unexpected changes. There is a wide range of estimates for corn yield, from 178.5 to 186.9 bushels per acre, with the whisper number coming in at 184.0 B.P.A.

Lusk notes that acres are a major wild card and can be revised based on the FSA certification report released tomorrow. While August is not typically the month for revising national acreage, it's possible.

Rumors of discussions between Ukraine and Russia to end the Black Sea export standoff have had little impact so far. Lusk believes that heavy rains expected across the heart of the crop belt are bearish, but they've been advertised for several days and may not affect prices as much.