Takeaway

The presenter's core view is that a significant 7.5 bushel/acre discrepancy between the USDA's August corn yield estimate and the Pro Farmer tour's findings has created a bullish setup. The market is currently trading the lower Pro Farmer number, putting significant weight on next week's September WASDE report. If the USDA revises its yield estimate downward, the presenter sees the potential for corn futures to rally into the high $5s or even $6.

What the presenter said

• The USDA's August corn yield estimate of 180.7 bushels/acre is 7.5 bushels higher than the Pro Farmer Crop Tour's result of 173.0 bushels/acre. [00:47]
• The presenter argues that the futures market is currently trusting and trading the lower Pro Farmer tour number. [01:03]
• The grain complex has shown bullish momentum since the Pro Farmer tour was published, with corn futures roughly a dollar higher since June 30th. [01:51, 02:16]
• Evidence of deteriorating domestic production continues, as soybean good-to-excellent ratings dropped by two points this week, while corn ratings held steady. [03:07]
• If the USDA adjusts its figures closer to Pro Farmer's, the presenter suggests corn prices could reach the "high $5 or even $6" range. [03:40]
• The upcoming September WASDE report is highly anticipated and is expected to be the next major market focus. [04:10]
• The presenter also advises watching the CFTC Commitment of Traders reports for managed money positioning. [04:56]

Trade ideas

• None stated. The presenter put forward a market view but did not outline a specific trade.

Levels and data cited

• USDA Aug Corn Yield: 180.7 bu/acre
• Pro Farmer Corn Yield: 173.0 bu/acre
• Nov Soybean Futures: Trading around $13
• Corn Futures Potential Target: High $5s / $6
• Data Cited: USDA WASDE Report, Pro Farmer Crop Tour, CFTC Commitment of Traders (COT) reports, weekly crop condition ratings.

Risks and what would invalidate this

• The USDA's September WASDE report might not dramatically adjust its yield estimates toward the Pro Farmer numbers.
• Crop conditions might not continue to deteriorate as expected.