Chicago Board of Trade Market News
Outlook: In the wake of the August WASDE report, the market has largely been focused on Midwest crop tour reports, especially those of the ongoing Pro Farmer tour. So far, the tour has noted frequent incidences of ear tip back in Ohio, Indiana, and South Dakota but little other negative news. The tour’s estimation of Nebraska’s yield found a 4 percent decrease from the prior year while yield estimations in Indiana were 6 percent higher than 2015. Yield estimates for Illinois were pegged at 193.5 bushels per acre, up from 188 the prior year. In total, the tour results so far indicate the USDA’s latest yield estimate may be overstated, but likely not by much.
Thursday’s export sales report was bearish with sales of 2.8 million bushels of old crop corn, the lowest sales figure for the marketing year. The sales figure is on-track to meet USDA’s projections for the year but lagging export shipments threaten the ability to meet the forecast. Shipments for the week totaled 41.2 million bushels, below what was needed to meet the USDA’s forecast.
December corn futures are drifting to the downside but lack any serious direction. The December contract closed below the 10-day moving average which give slight advantage to the bears but support is not far off, lying at $3.29 initially and again at $3.22. While the long-term trend for corn is deeply bearish, upward corrective action is still possible. In such case, resistance lies at $3.44 and $3.46, where the market was turned around earlier this week. Without significant news developments, the market is most likely to continue drifting sideways to slightly lower. The most bearish news, USDA’s record yield projections, has already been absorbed by the market and traders now wait for confirmation or rejection of USDA’s forecasts.
Cash prices across the U.S. have been largely stable with increases noted in interior areas. Interior basis has strengthened as exporters are procuring supplies to fill an increasing number of corn vessels in the lineup. The national corn basis, however, has remained steady this week at $0.31 under the September corn contract. Many farmers are now perceiving flat price sales as their best marketing option before harvest kicks in.