Acreage Estimate Lowered in Corn

March 20, 2018 8:26AM CDT

A noted crop scout has estimated his US corn acreage at 88-89 million acres compared to the last USDA estimate at 90 million.  They see farmers preferring cotton to corn in the southern belt due to high cotton prices.  Using 88.5 million acres and a trend line 174 bushel per acre yield, would see a measured decline in ending stocks for the 2018-2019 season. 

May corn gapped lower yesterday just below tend-line support at 382 and a gap remains between 382,5 and 382.  The market experienced the lowest close since Feb 23.  It was a classic risk off type trade yesterday with the market seeing long liquidation tied to trade concerns from trading partners worldwide in retaliation to recent tariffs on steel and aluminum imports.

Corn demand remains robust with US exporters announcing the sale of 206,000 tonnes of corn to Japan and 115,000 tonnes to unknown destination yesterday.  The 50% retracement level of the entire move is now at 374.5.  Not sure which grain led the way, but the longs were looking to exit all across the board yesterday in the grains.  Support is seen at 374 with resistance at 378.

Corn May '18 Daily Chart


RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.