This morning is the fifth consecutive session the market has made a new contract low and technical indicators are extremely oversold. The managed money trader category sold 56,875 contracts last week going from net long 39,802 contracts to net short 17,073 contracts as of August 22. Trend followers continue to press the short side of the market; possibly on concerns over trade wars concerning NAFTA. The trade also did not view the Farm Journal Tours national yield estimate of 167 bushels/acre with bullish fanfare. The USDA’s August estimate is at 169.5 bushels per acre. A 167 yield, using current USDA numbers, would leave ending stocks at 1.920 billion bushels and a 13.4% stocks to usage. The market remains oversold and in need of a correction, but needs a catalyst to spark this correction. The last three times the managed money trader category went from a long position to a short position, they averaged over 200,000 contract net short. The market bottomed out last year on August 31, but from a much lower level of 314. The recent weakness could still be attributed to producer old crop selling as the timing is right for some to “throw in the towel”. The next level of support is 347.
Dec ’17 Corn Daily Chart