Corn Prices Weak As Harvest Nearly Complete
Today’s Spotlight Market
While strong exports for Soybeans vs. Corn has supported this seasons Soybeans futures prices, the picture for the ?new? crop that will be harvested in the fall of 2015, may start to tell a different story. Analysts? are forecasting the potential for a record Soybean harvest in South America in 2015 as continued strong demand for Soybeans and relatively high prices favors additional acres for Soybean plantings vs. Corn. Even if Soybean exports increase next year, record production could cause global Soybean ending stocks to surge to record levels next season, while global Corn inventories have the potential to fall sharply as planted acreage shifts from Corn to Soybeans.
Fundamentals
Record U.S. Corn production has not slowed U.S. producers who have nearly finished harvesting this season?s crop. The USDA reported that 89% of the U.S. Corn crop is now in the bins vs. the 10-yr average of 85%. The two largest Corn producing states, Iowa and Illinois, are even further ahead of schedule at 92% and 94% respectively. All this harvested Corn needs to go somewhere with many producers opting to store the grain on the farm in the hope of selling at a later date when prices are more attractive. Analysts report some tightening of the basis in parts of the Corn Belt, where Ethanol plants have been paying a premium to obtain needed supplies. However, Corn exports have been a bit disappointing; with exports for the 2014-15 season running at just over 17% of the USDA estimate vs. closer to 20% during the past 5 years for this time of year. Soybeans exports on the other hand are running at a record pace which helps to explain how a record crop in Corn is keeping prices below $4, while a record soybean harvest has not kept prices below $10 per bushel for any meaningful amount of time.
Technical Notes? -? View Today’s Chart
Looking at the daily chart for March Corn, we notice prices rebounding off of the major low near 330.00 made back in early October. While it appears that a classic ?V? bottom is forming on the daily chart, the recent test of resistance at 400.00 was met with some significant selling pressure which could stall the recent price recovery. A close below the 20-day moving average could see prices attempt a test of near-term support at 371.50. A close above the July 17 high of 407.00 could signal a potential test of the 200-day moving average, which is currently near the 431.50 price level.
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