Market Perspectives – July 5, 2018

Chicago Board of Trade Market News

Outlook: The corn market seems to have found support near $3.60/bushel and is waiting for confirmation of bullish or bearish factors ahead. Weather challenges are arising in the U.S. and abroad. December corn futures are down 1.5 cents this week from last, a negligible percent change but important victory for bulls looking for support.

USDA’s Export Sales report is delayed one day until Friday, July 6th, due to the U.S. holiday this week. Monday’s Export Inspections, however, showed 1.537 MMT of corn exported through June 28th, a modest weekly increase. YTD export shipments are down 6 percent, but USDA’s latest projections call for 2017/18 exports nearly equal to those of the prior year.

The U.S. crop is in excellent condition with 76 percent of the corn rated in good/excellent condition and 17 percent presently silking. Both figures are above their respective five-year averages, with nearly twice as much corn silking this year as during “normal” years.

U.S. weather remains largely favorable for corn development, except for some flooding in parts of the Midwest and high temperatures that persisted this week. The outlook induces more abnormal warmth for most of the Corn Belt but, fortunately, normal or below-normal night time temperatures which will allow the crop to recover.

From a technical perspective, December corn is trading sideways, waiting for fresh news. The selloff seems to have ended with strong commercial buying and technical support at $3.60/bushel. Funds are still net long corn futures but pared back their position in last week’s CFTC report. Choppy, sideways trading is to be expected until fresh influences are found.