Corn Prices Trade Off Recent Lows Ahead Of USDA Report
Today’s Spotlight Market
Here are the average estimates for this morning?s USDA crop report:
Corn production: 13.5 billion bushels-Aug est. 13,686 billion bushels
Corn average yields: 166.6 bushels per acre-Aug est. 168.8 bushels per acre
Soybean production: 3.83 billion bushels-Aug est. 3.916 billion bushels
Soybean average yields: 46.0 bushels per acre-Aug est. 46.9 bushels per acre
Fundamentals
Grain bulls may turn to the Corn market as their best hope for a rally this year as private forecasters continue to expect the USDA to lower its Corn production estimates as the harvest begins. In particular, analysts note concerns about the yield potentials in the eastern Corn Belt, where a cool and wet spring may have damaged the emerging crop. Globally, Corn bulls note that it appears South American producers will curtail Corn acreage in favor of Soybeans in the upcoming crop year which could help to limit Corn export competition in 2016.
The weekly Crop progress report was released one day later than usual this week due to the Labor Day holiday, but crop conditions remained unchanged for the week with the Corn crop rated 68% good to excellent and the Soybean crop at 63% good to excellent. As I mentioned earlier this week in my Xpresso article on Soybeans, the USDA has historically only made minimal changes to its estimates in the September report, preferring to wait on actual harvest data to refine their numbers. So any major changes either higher or lower may catch market participants by surprise.?? ?
Technical Notes? -? View Today’s Chart
Looking at the daily chart for new-crop December Corn futures, we notice prices once again holding in the support zone (highlighted in blue) between 360.00 and 370.00. The recent rally which has taken prices from 360.00 to nearly 375.00 has occurred on lower than average trading volume and appears to be the result of short-covering buying ahead of the USDA report. Prices are testing the 20-day moving average which has held as resistance for the past several sessions. The 14-day RSI has moved from near-oversold levels to a more neutral reading of 45.76. The next chart resistance level is seen at the August 25 high of 386.75, with chart support found at the august 12 ?spike? low of 357.50.
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