Price scenarios as harvest approaches

As we wind down July, the farmer's attention will quickly turn to harvest preparations. Combines will be serviced and pulled out of hibernation, wagons will be greased and checked over, and by-hand yield checks will be the talk of coffee shops.

Last week, we discussed the different balance sheet possibilities that exist as we approach the harvest season, but mostly just looked at the supply side. This week, we’re going to look at the possibilities that exist by adjusting the demand side.

In the corn market, the balance sheet breaks down demand into three general categories: feed and residual (F&R); food, seed and industrial (FS&I); and exports. For this discussion, we’re going to use the U.S. Department of Agriculture's (USDA) current production figures for both yield and harvested acres.

The USDA currently...