Chicago Board of Trade Market News
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Outlook: The corn market has been on the defensive this week even as little fundamental news has developed. The harvest is progressing well across the Midwest and reports are surfacing of large grain piles developing in corn-laden states. The thought of so much corn lying on the ground brought bearish sentiment to the markets which retreated from recent highs. With the massive volume of corn coming in from the fields, logistics are coming to the forefront of traders’ minds. Any logistical breakdown or interruption would exacerbate already burdensome harvest supplies and would likely send the market reeling. Fortunately, the good weather enabling Midwest harvest progress is also positive for grain logistics.
U.S. corn exports this week were largely neutral for the market with a slight bullish upside. The USDA’s estimate that 58.0 million bushels of corn were sold last week and 34.2 million were exported was shrugged off by the market and perceived as merely adequate. The upside, however, is that the exports keep year-to-date totals up 74 percent from the prior marketing year which may be enough to motivate USDA to increase their export forecasts in the coming November WASDE. The supply situation in Brazil will keep U.S. exports lively though at least February, providing inclement weather doesn’t interfere.
December corn futures retreated below $3.50 on Tuesday and have failed to move above this key point since then. Bulls were unable to overcome strong resistance just shy of $3.60 which has suspended what once looked to be a building rally. For now, December corn remains at least in an upward channel, if not a mild uptrend, but technical indicators are beginning to break down and point to sideways, rangebound trading in the near term.
In contrast to the competitively-priced, supply-burdened corn market, the oat market has been lively over the past month. After putting in life-of-contract lows at $1.71 in September, the December oat contract climbed over 30 percent to reach today’s close at $2.22. The oat market has been lifted as wet weather in Canada is delaying the harvest and posing real concerns that supplies may be much tighter than expected.