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NEAR-TERM MARKET FUNDAMENTALS: The US corn crop was planted very late this spring and now its maturation process is slowing. This has left the percentage of the crop that is mature at the lowest level for this date since at least 1985. Traders and analysts are increasingly concerned that the slow rate of maturation will mean that yields will go down on future USDA reports, rather than up, although it is not clear whether this might be reflected on the upcoming October Crop Report. Only 37% of the US corn crop was mature as of September 27th. This is up only 16% from the previous week which is a rate that may not be fast enough to beat the onset of cold weather according to one analyst. He pointed out that 72% of the crop is normally mature at this point based on a 5-year average. Crops are especially far behind in North Dakota (6% mature vs. 55% average), Minnesota (17% vs. 59%) and Nebraska (33% vs. 66%). The corn harvest stands at 6% complete versus 8% last year and a 5-year average of 19%. The highest percent complete was 32% in 1991 while the previous lowest (since 1985) was 7% in 1992. The corn crop’s condition is still good with 68% rated good/excellent compared to 68% last week and 61% last year. This week’s export inspections were below trade expectations in corn at 29.582 million bushels. This was down from 40.912 million bushels last week. This week’s lower total falls well short of the average pace of 42.191 million bushels needed each week to reach the USDA’s export projection for the current marketing year. The US Grains Council estimates China’s corn crop at 148.79 million tonnes, about in line with recent estimates coming out of China. This is well below the 160.0 million tonnes forecast by the USDA in September and that in turn is down from 162.5 million forecast by the USDA in August. Mexico said yesterday that it will decide soon on whether or not it will allow experimental plantings of genetically modified corn. Trade sources report that a Chinese feedmill has imported several thousand tonnes of corn from Thailand in recent weeks. The Maize Industry Procurement Association in Taiwan will tender for 56,000 to 60,000 tonnes of US or Brazilian corn on Friday.
TODAY’S GUIDANCE: The record slow pace of development for the US corn crop this year raises the possibility that some of it the will never fully mature. With the fast-developing soybean crop starting to move past the corn crop in the race to mature, this lends further support to corn versus soybeans on the corn/soybean ratio. Wet weather is forecast in the western Corn Belt later this week, and that may further slow the maturation process. Therefore, the direction of the corn market may be changing. First support is at 334 to 335 in the December contract with additional support near 328 to 330. First resistance is at 346 1/2 with the next resistance up at 369.
