Chicago Board of Trade Market News
Outlook: December corn futures are 2 cents (0.4 percent) higher this week after dipping lower to test support near $5.10 and strengthening modestly heading into the week’s end. Fresh fundamental news has been light, but harvest activity is picking up in the U.S. and providing more supply information. Funds have been flat the market this week, seemingly content to hold positions while awaiting more harvest data. The U.S. Gulf continues to recover from Hurricane Ida with five facilities operational now and a two more expected online next week.
U.S. export sales continue to reflect the logistics complications at the U.S. Gulf, with net sales and exports remaining below year-ago levels. Improvement is occurring, however, with net sales up 51 percent for the week ending 16 September at 0.373 MMT and exports up 153 percent at 0.485 MMT. YTD bookings (export plus unshipped sales) total 24.9 MMT, up 10 percent YTD. Industry sources say sales and exports from the Gulf are likely to pick up strongly once additional export capacity is available.
The U.S. corn crop is quickly approaching peak harvest with favorable weather through early this week facilitating the crop’s advanced maturity. As of Sunday, USDA reported 57 percent of U.S. corn was mature, up from 47 percent on average for mid-September. Ten percent of the crop is harvested so far, in-line with the seasonal average. Notably, however, several states, including Illinois, Indiana, Iowa, and Minnesota, are 3-6 percent ahead of their normal harvesting pace this year. Progress is expected to slow across the Eastern Corn Belt this week, however, as a wet weather system moves across the region.
U.S. cash markets and basis levels remain strong, though are starting to show the seasonally expected harvest pressure. The average basis across the Midwest his week was -11Z (11 cents under December futures), down from 0Z last week but above the -27Z that occurred this time last year. Barge CIF NOLA prices are up 1 percent this week at $237.50/MT while FOB NOLA offers, while highly variable, are largely steady at $281.50/MT.
From a technical standpoint, December corn futures worked lower from last week’s highs to test support near $5.10, which held and helped the market strengthen Wednesday and Thursday. On Thursday, the market settled above short-term trendline resistance at $5.29, which could create technical strength for a rally to the 50-day MA at $5.43. Overall, December futures are trading a wide range from September WASDE-lows at $4.97 to the 30 August high at $5.58. Market momentum is turning higher and the continued improvement in Gulf exports should keep futures supporting going forward.