It’s all about the WASDE report at the moment. It’s due out tonight and the US punters were not game to move too far either way in last night’s session.
The general consensus is that the USDA will reduce corn yield estimates to about 166.2bu/ac (10.43t/ha). Looking at the yield modelling I use that calculates yield potential from weekly crop ratings it confirms their expectations. If anything my model suggest 165bu may be closer to the mark.
Anything other than a drop in yield estimates for corn may see corn futures slip but with Dec corn futures values already only 11c/bu ($5.40) above the lowest value we have seen since November last year than it raises the question how low could it go it they don’t drop yield estimates. This report may turn out to be a non event for corn as a reduction in corn yields is already factored in and if they don’t reduce them downside is limited or they may simply run with their consensus and assume the USDA is wrong.
At the end of the day big production numbers for Russian wheat is what is hurting this market. An increase in the value of the rouble would decrease the income potential to Russian farmers and would also make Russian wheat more expensive on the export market, if their domestic value remained unchanged. I tend to think their domestic values would decrease to compete if the rouble appreciates thus hurting world values more so than what is happening with a weaker rouble.