Corn Report, 08/31/2016

Wednesday, August 31, 2016


December corn had its seventh consecutive negative day yesterday settling down 5 cents on good volume. Funds sold 14,000 contracts making the spec funds short 225,000 contracts. RSI is 25 indicating the corn is getting oversold. The last time we closed lower than this level on the monthly charts was September of 2009. Spreads also widened on this break with Sep/Dec widening out to 12. That was 2 ¾ wider for the day. New crop spreads also widened with Dec/July trading wider than 25 cents. There were 440 contracts of Sep corn delivered last night. This was a more than expected and could be a little bearish to the spreads.
Resistance in CZ is $3.27 and then $3.36. Support is $3.15 and then $2.97.
We saw very little farmer selling yesterday on the break. We hear early harvest reports of great yields, but we are hearing a few reports not as good as expected. A well followed advisor and crop scout lowered his corn crop yield and production estimate, but the market shrugged it off. Western basis remains under pressure with most of the users mostly covered for fall into early winter. Elevators’ selling new crop hedges to make room is the main reason for the weakness. Logistics and forced farmer selling should continue to pressure spreads and basis. The smart guys still want to sell the next bounce we see.


Unless otherwise noted, the posts on this blog should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by INTL FCStone Inc. or its subsidiaries. INTL FCStone Inc. is not responsible for any trading decisions taken by persons viewing this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by INTL FCStone Inc. or its subsidiaries. Reproduction without authorization is prohibited. All rights reserved.

Market Intelligence Free Trial