USDA Report Sparks Corn Price Surge Amid Tightening Grain Supplies
The August World Agricultural Supply and Demand Estimates report from the USDA came out swinging on Wednesday, tightening stocks and lowering yield projections that pushed corn and soybean prices higher in midweek trading.
However, a moderate setback was seen Thursday morning due to technical selling and profit-taking. Despite this, the stars may be aligned for future gains later this summer, as several experts suggest.
Matthew Pot of Grain Perspectives Inc. notes that 'no marketing plan should ever be focused on the August USDA report,' but rather on planning in May, June, and July. He believes that the data from the report indicates a tightening U.S. grain supply situation, which could lead to higher prices.
Pot also warns of potential volatility due to fund liquidation ahead of a possible Federal Reserve interest rate hike, which would add another headwind for speculative long positions in corn.