USDA’s August World Agriculture Supply and Demand Estimate Reports, or WASDE, predicted slightly higher corn and soybean production. But how much trust can farmers put in the numbers? Bryce Knorr, Editor Emeritus at Farm Futures, says we really don’t know how big these yields will end up being.
“The trouble is, these yields tend to change as we get to more information, particularly as we get results off the combine. The August report is kind of notorious for that. Sometimes it’s right, sometimes it isn’t, but remember this is just based on some field surveys. As we get actual harvest results in, that gives us a much better sense of how big the crops are.”
Knorr cautions farmers about trading on the headlines.
“Keep your blinders on. Know where your profit levels are. Know what you need for a profit, and know how important grabbing that while you can get it is to your operation, and again, that changes. Every operation is going to be different. Some people are going to be able to hang on and gamble; other people are not.”
So is it time to price inventory and move on to 2027?.
“If you adopt that, put in the bin, you are kind of hoping and praying, and you have to be able to live with consequences. And the consequences, if you’re going to hold that long term, triggered for like the nine-month length of a typical commodity loan, you know prices may very well be lower, and they’re much more likely to be lower than they are higher. So you do have to be careful. Make sure that you can absorb that risk.”