Mark Townsend, Agriculture Agent Associate | mtownsen@umd.edu
University of Maryland Extension, Frederick County
All eyes have been on news headlines coming from the Black Sea for the last two to three weeks since the termination of the previous agreement between Russia and Ukraine. The escalation in the war between these two nations has seen drone strikes, missile engagements, and major destruction of Black Sea ports like Odessa in Ukraine. Traders have watched these headlines and acted accordingly in the market place as the price of corn and wheat retraced previous months losses.
However, a bull market needs a continuous stream of bullish news to continue the price momentum. Traders have since lost some interest in these headlines as there appeared to be a break in the action in the middle of last week. No less, the slow in headlines corresponded with a wetter weather outlook for many areas of the Midwest. The December corn market has fallen back to the low $5.00 mark; a price level seen in Mid-July following the rather bearish USDA planted acreage report.
With much of the US corn crop “made”, the trade may be moving beyond the volatile weather market observed these last two months. However the future is not so rosy either; August is typically a rather turbid month for the December Corn contract with traders seeking headlines of yield prospects, South American harvest updates, and South American planting intentions. With this, the goal of this excerpt is to help answer the question, “when does the corn market rally in August?”
As circled in blue, August tends to be rather choppy with rapid price movements throughout the month. Additionally, one can also observe a slight downward trend during this time period.
In evaluating December Corn historical price data, 10 of the last 15 years saw a decline in the corn price from the beginning of the month to the end of the month. On average, these years saw an average decline of $0.18 during this period, as well as a daily price change of about -$0.005/day. 
Of the five years when corn did rise in August, three of which appear to be induced by the same phenomenon. The years 2011, 2013, and 2022 saw an August WASDE report indicating a lower corn yield than the July report of the same year. The August reports lowered the yield estimates by 5.7, 2.1, and 1.6 bu/ac respectively for 2010, 2013, and 2022.
The other year’s increase was the result of a catastrophic drought in Russia (2010) and a dramatic increase in export sales to China (2020).
With this being said, historically the USDA often changes the corn yield number in its August WASDE report. Last month’s report reduced the corn yield estimate by 4 bu/ac–an infrequent occurrence for the USDA to revise downward in July. In this, there may exist reason to believe that the August 2023 WASDE corn yield estimate will revise downward once more.
So to answer the question at hand, August rallies appear to come on the heels of pretty significant news: extreme crop failures, unprecedented demand, and lower than expected yields. Given our currently lackluster export demand and relatively high prices, a run on US corn appears rather unlikely. And though the Ukraine/Russia War appears to have disturbed the global supply chain for commodities, traders do not appear to trade these headlines for much longer. Currently, the US Corn crop ratings are the second worst observed since 2012 given the widespread drought across the corn belt. With this, pay close attention to the Aug 11, 2023 report as there could be a price movement with a potential yield revision. 
