In the past few weeks the corn market has been relatively quiet, but two things the market is watching closely is the weather and politics (i.e. trade).

“The two things that move the market the most are weather and politics. We’ve got our hands full with both of those,” said Frayne Olson, grain marketing economist at North Dakota State University.

“These last couple weeks it’s been a little bit quiet in a relative sense,” he continued. “When there’s a lot of new news in agricultural markets we focus on what’s happening in ag; but when we get into a time where it’s kind of quiet in the world of agriculture, the market still needs to trade and the market is more interested in news and the focus then turns to outside of agriculture and we start looking at what’s happening in other markets. Obviously what’s happening in the commodity markets, like the energies, is important, but also the equity markets.”

Regarding trade, there has been some movement, but not the kind the market and producers want to see. As of Sept. 1, we’ve seen an increase in tariffs between the U.S. and China with China increasing the tariff on U.S. soybeans from 25 to 30 percent. The good news is that it hasn’t impacted the market because they’re not buying any soybeans from the U.S. to start with, so it really wasn’t “new news.”

On the weather side, things have been pretty tranquil for the most part and even “somewhat positive.”

“There are times when what happens in the general economy or what’s happening in the energy markets tends to have a large impact on the psychology of the ag markets,” Olson said. “So even though we’re watching the weather, the weather forecast with the exception of the hurricane, has been relatively benign. It’s actually been somewhat positive.”

The areas that have needed some additional rain are getting some rain, he noted, adding that up here in the Northern Plains, conditions have been a bit cool, but in the Corn Belt temperatures have been normal.

“Nobody is getting terribly excited because we don’t have any frost news right around the corner,” he said. “Again, the concern about bigger global issues like a slowing world economy, some concerns about what’s happening in the U.S. economy, take a much bigger role in traders’ attitudes. That’s kind of where we’re at right now.

“Looking ahead, as we get into later September, if we’re going to gain some growing degree days, that usually comes in September because it’s a little easier to gain some days, some heat units if we have some nice weather versus what we had in late July or August,” he added. “Everybody recognizes we need some really good weather this fall to get the crop to finish and reduce the risk or the impact even if we do have an average frost or typical frost date.”

Olson feels things will get a bit more exciting in the next few weeks. One reason for that is because USDA will be updating information for production along with yield numbers in its next World Agricultural Supply and Demand Estimate (WASDE) report on Sept. 12.

“Now these are still estimates, but at least we’ll have field observations as well as farmer surveys and some of the satellite imagery that they compile all this information and try and put an estimate to yield, so there is kind of an expectation that the yield numbers may start dropping the average yield numbers, not only for the nation, but also particular states in the eastern Corn Belt in particular,” he said. “But again, we’ll have to wait and see.”

One more thing to pay attention to in the Sept. 12 WASDE report are the inventory numbers. Each quarter USDA estimates how many bushels of corn, soybeans and wheat are still left in the bins and those September numbers become the ending stock number for the final four quarters.

While much of this information can also be applied to the soybean market, looking at corn specifically, Olson said the market “is in this funny phase right now where there are some new things happening on the trade front and there’s a lot of discussion about that, but it’s not ag specific.”

“We’re watching the weather forecasts very closely, but the weather forecasts so far have been at least favorable for corn development,” he said. “So the corn market really hasn’t done a lot. It hasn’t gone up tremendously, it has fallen tremendously.”

Locally, harvest delivery corn was $3.15 cash price. At one local elevator in west central Minnesota regularly followed in this column, as of Sept. 4, the September cash price for corn was $3.35 and basis was 30 cents under. January 2020 cash price was listed at $3.36 and basis was 35 cents under.


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