Corn price rises to a 2-month high in anticipation of a lower US crop

Survey respondents anticipate that the USDA will downwardly correct both the corn yield and acreage estimates. So far, the USDA has estimated a figure of 13.6 billion bushels, which is 4.5% less than last year. However, some observers believe that the USDA will undertake too minor a downward adjustment, leaving further downside potential. 

The grain and oilseed markets are eagerly awaiting the latest forecasts from the US Department of Agriculture (USDA), which are due to be published on Friday. Ahead of their publication, corn prices have already gained to a two-month high of just shy of 400 US cents per bushel because the US crop estimate is expected to be downwardly revised, albeit only slightly. 

A slight (acreage-related) reduction of the crop forecast is also anticipated for soybeans, though the tough competition from South America will prevent prices from profiting from this. What is more, harvesting in the US has been making faster progress than on average in recent years. The wheat price has gained by 13% in the last four weeks.

"The prolonged dry spell in Australia, which is also forecast to continue over the coming months, could render the recent official increase in the crop estimate null and void. It is also too dry in the Black Sea region and in parts of the US Great Plains, which is hindering the sowing and development of plants ahead of their winter dormancy", anticipates Commerzbank.