Market analysts saw a potential repeat of last year’s seasonal low coming at the end of August, as corn futures rallied Aug. 31 after forced sales from delayed pricing contracts helped to set new contract lows Aug. 30.
“I think we’re trying to find a seasonal bottom in this corn market right now,” said Jim Nemitz of Hiawatha, Iowa-based MSI Futures.
While prices continued lower than he expected, Nemitz said the end-of-month buying may have washed out some short positions, giving the market a chance to move higher.
It may take a while for corn futures to “turn the ship around,” Nemitz said, as corn prices have seen steady declines since mid-July.
Speculation continues in the market about yield, he said.
On Aug. 31, INTL FCStone estimated national average corn yield at 166.9 bushels per acre and national average soybean yield at 49.8 bushels per acre.
Allendale, Inc. released a survey Sept. 1 projecting national corn yield at 166.7 bushels per acre and soybeans at 47.1 bushels per acre.
USDA’s next supply estimates will be issued Sept. 12.
“The combines are going to tell the story,” Nemitz said.
He has advised farmers to move old-crop corn and own it on paper, so risks are known.
News that Vietnam will end its suspension of U.S. dried distillers grains imports adds to positive demand news for ethanol, Nemitz said.
In a Sept. 1 news release, U.S. Grains Council President and CEO Tom Sleight said, “We are very pleased to hear the news from Vietnam overnight that, as of today, import permits will be issued for U.S. DDGS and new phosphine fumigation protocols will be acceptable for shipments of U.S. corn, DDGS and wheat.”
According to the USGC, Vietnam was the third largest importer of DDGS in marketing year 2016 at over 1 million metric tons.
“I’m kind of friendly on the corn market,” Nemitz said.
Unlike corn, soybean prices have been gradually working higher. There are some questions about how much damage flooding and rains in the Delta may have on the new crop, Nemitz said.
Old-crop supplies continue to pressure both corn and soybean markets, he said.