For the past two weeks, grain markets had been exploding higher on fears of hot and dry weather in the forecast, which could threaten this year’s crop yields.
But on Wednesday, the USDA stunned markets lower with a revised outlook for this year’s corn, wheat, and soybean crops, raising estimates for global stockpiles of the three major commodities. The report served as a reminder that global harvests should replace any U.S. production losses, forcing the markets quickly lower.
During the week, corn prices lost as much as 35 cents per bushel, wheat lost 50 cents, and soybeans sank by over sixty cents.
Despite the tough week, grain prices are still at profitable levels for most producers. And, if weather forecasts worsen, concerns could spark another rally, giving farmers another opportunity to lock in prices in the coming weeks.