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NEAR-TERM MARKET FUNDAMENTALS: Some traders and analysts indicate that inflationary concerns are in the markets again this morning with this is thought to be providing some background support in the grain markets. This is particularly evident in a weaker dollar and higher gold. Weather also remains a factor although this is more mixed than it appeared yesterday. Warm weather and some showers are still expected for many growing areas through the end of this week with a gradually shift to substantially lower temperatures and a possible frost in the north central and NW Corn Belt starting early next week. One forecaster indicated that the GFS forecast has shown outbreaks of cold air in the 6-10 day timeframe on a number of occasions recently, but these have not resulted in an actual cold snap so far. The corn market gained on soybeans in a down day yesterday. This came on a late recovery yesterday and that continued overnight. This week’s crop progress report showed only moderate progress over the past week with 97% of the corn crop in the dough stage and just 80% dented. This compares to 5-year averages of 99% for dough and 93% for dent. Only 21% of the crop was mature as of Sunday, up only 9% from the previous week and far below the 5-year average of 55%. The corn crop is rated at 68% good/excellent compared to 69% last week and 59% last year. The 10 year average for this time of year is 57%. Taiwan Sugar reportedly bought 23,000 tonnes of US corn late last week. This week’s corn auction by China showed reduced sales, and this was credited to the advancing harvest. This week’s sales were 744,400 tonnes, down from 1,320,700 last week. This came on a total volume offered of 3,192,500.
TODAY’S GUIDANCE: The maturation progress was a little slow for corn this past week. That may provide some temporary support above the early September lows, especially if the dollar continues heading lower. Some support may also come from the soybean/corn relationship which remains too heavily weighted in favor of soybeans. However, a rally should still be a selling opportunity. Light first support is near 307 1/2 and 302 1/2 in the December contract with better support at 290. First resistance remains at 320 with the next resistance near 329 to 332 1/2.
TODAY’S MARKET IDEAS: The late recovery yesterday and into the overnight session suggests that corn is running out of sellers. Another swing down still leaves 284 1/2 as a target price.
