USDA Report May Spark Wild Corn Price Swings

Farmers and traders are bracing for potential price swings in corn futures as the USDA's August Crop Production report approaches.

The report, scheduled for release on August 12, will include the first corn and soybean yield and production estimates of the season based on farmer surveys.

According to Bruce Blythe, Senior Editor at Farm Futures, the root mean square error (RMS) in the June Acreage report is a key indicator of how close or far apart current and final acreage numbers will be. The RMS for corn plantings is 1.4%, meaning there's a 2 out of 3 chance that the current estimate won't be above or below the final estimate by more than 1.4%.

This translates to an enormous range, as Jon Scheve, adviser and owner of Minnesota-based Scheve Grain, pointed out: 'At the low end, corn futures could easily trade into the mid-$5. At the high end, prices could slip below $4.'