Attention was fixed on the World Agricultural Supply and Demand Estimates (WASDE) report.
However, another market mover came into play later in the day session, carry all grains up.
The U.S. Department of Agriculture (USDA) today released its July World Agricultural Supply and Demand Estimates (WASDE) report. Grain markets delicately reacted this report, which seemed mundane. However, something caught corn’s attention. Brian Grossman, market strategist with Zaner Ag Hedge, explains…
“According to the report, we have 2.34 billion bushels of corn. That is the largest on record, if accurate. Yet, corn rallied,” Grossman said. “If you look to the ‘19/’20 market, we two bilion bushels of corn on hand, even with a 166 national average yield and acreage adjusted.”
Grossman says recent spread activity can help explain today’s market action.
“The calendar spreads have been bullish. They have been holding the percentage of full carry in the 30- to 40-percent range, even through the ‘bearish’ Planted Acreage report. I believe the market knew what was going on and it was getting the corn it needed for the meantime,” Grossman said.
While it may be unpopular, Grossman believes the market is aware of the problems out there. He believes a ‘big surprise’ may still lie on the horizon.
“We need to learn how to ignore the chaos of the USDA, (and) look to see what the commercials and spreads are doing,” Grossman said. “Now that we’re through this report, it seems like managed money decided to give up on the bearish push they initially had (and) got onboard with the direction of commercials, (which) we were to drag on.”