Corn crop may not get any bigger, but wheat collapsing may drag prices lower

August 29, 2016 6:17AM CDT

The chart action was quite bearish late last week but there is still a decent argument that the August report may be at or near the highest production level of the year as the improved weather in August and September came about too late to help corn productions expand much.  December corn closed lower Friday ahead of the official Pro Farmer tour results.  Pro Farmer predicted the national average corn yield at 170.2 bushels/acre, which is 4.9 bushels below the USDA estimate at 175.1 bushels/acre.  The trade was looking for a 2-3 bushel lower estimate.  If we plug in the lower yield, ending stocks come in at 1.995 billion bushels from 2.409 billion in August.  December corn has now closed lower for five days in a row and experienced a new contract close on Friday.  The collapse in wheat prices is an added bearish force for corn to absorb.  Trend-Following fund traders are already net short 148,391 contracts.  December corn should see stiff resistance near $3.33 to $3.36 zone and it will take a move back over this zone to assume a low in place.  A resumption of the downtrend leaves $3.14 as next downside target.

Corn Daily

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