Corn Futures Prices Deflate after USDA Rally

October 3, 2016 7:11AM CDT

Corn futures prices are deflating after a rally stemming from Friday’s USDA Crop Report. The underpinned by lower-than-expected inventories.

Friday’s USDA quarterly crop report said 1.738 billion bushels of corn were in storage as of Sept. 1. It was below the amount analysts had expected on average, indicating that livestock producers had fed more corn to their animals than anticipated.

The December contract in corn futures was down 2.18 percent at 393-2 a bushel in Monday morning commodities futures trading.

Commodities futures markets participants in the grains sector are awaiting the next USDA crop report, due in two weeks, to confirm production numbers and carryover levels, lending possible support to grains futures prices. Analysts say lows in the grains futures market are usually in the month of November, once harvest is completed. The annual corn crop is estimated to be another record at 15.1 billion bushels, according to analysts.

The rest of the commodities futures markets are mostly focused on Friday’s September labor data, but the week brings a number of reports to consider beforehand.

The remainder of this week’s U.S. economic calendar brought the September Institute for Supply Management (ISM) index, which rose to 51.5 in September from 49.4 in August. New orders and production at factories increased, although employment fell. However, any reading above 50 signals expansion.

Also on Monday, commodities futures markets participants absorbed Construction Spending data, which in August dropped 0.7 percent after a 0.3 percent slip in July, according to the U.S. Department of Commerce Department. It was the third decline in the past five months. Economists say the slowdown is temporary, and should pick up with increasingly strong economic reports.

September Auto and Truck Sales are due for release this afternoon, and according to most estimates are expected to fall 1 percent to 1.4 million, the fourth month of declining sales this year.

Tuesday’s economic calendar is mostly empty, while Wednesday brings the Trade Balance and Factory Orders for August, as well as the ISM Services index. Weekly Crude Oil Inventories are also due. Thursday’s lineup includes Challenger Job Cuts, Weekly Unemployment Claims, and Natural Gas Inventories.

The week culminates with the September Employment Report, which is expected to show an increase in nonfarm payrolls to 160,000 and an unchanged unemployment rate of 4.9 percent.

Wholesale Inventories and Consumer Credit, both for August, are also slated for release on Friday.

Corn Daily

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