For the USDA’s August World Ag Supply Demand Estimate and monthly crop production reports, RJ O’Brien Head of Market Insights Rich Feltes says there’s a lot of focus on how much USDA will lower corn and soybean yields from the July forecast. “The trade is looking for a 1.5 to 1.7 bushel cut in the corn yield and a slight cut in soybean yields. Given the weather pattern recently, it looks like there will be a dry finish to August. The market has been adding in risk premium. Even if we were to see these modest declines in yield, the trade will be anxious to buy a break.” The grain trade assumes the U.S. crop yield potential is eroding. “Crop ratings on Monday are expected to be lower than this prior Monday. There’s also a focus on international numbers: how much will USDA trim European corn production, increase Russian wheat production and will there be an adjustment in Ukraine’s exports?” The WASDE and crop production reports will be released at 11 a.m. central time.
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