Focus seems to be back on the possibility that yields are adjusted higher for next week’s USDA production update, and this is attracting selling. December corn could not hold the gains from Friday and pushed moderately lower yesterday. The September 1 stocks were 50 million bushels below the average estimate, but were still at a 29-year high of 2.295 bushels. This was also a 32% increase from last year’s September 1 stocks of 1.737 billion bushels. Yield reports continue to come in from producers with a better than expected theme. The weekly progress report showed harvest was 17% complete compared to 11% last week and 23% last year. The 10-year average for this time of the year is 24%. The forecast for the western corn belt has rain moving in on Wednesday, which could slide into parts of the eastern corn belt by the weekend. December corn continues to trade above the support trend line at 348.25. The market has already digested much of the bearish supply rhetoric with a fairly large speculative short. South American dryness issues will continue to be watched as longer term forecasts have a drier outlook. U.S. producers will look to store corn and sell soybeans waiting for a rally like last year. If La Nina talk re-surfaces into the peak of the South American production cycle, the trend followers could be positioned on the wrong side. Close-in support for December corn is 348 with 368 and 372 as next key upside targets.
Dec ’17 Corn Daily Chart