Commentary
December 22 corn faded from brief initial gains over the last two days and fell back near three-week lows posted overnight on strong crop ratings and a potential outlook for less-threatening Midwest weather. USDA late Tuesday reported 70% of the U.S. crop in “good” or “excellent” condition as of Sunday, down from 72% from a week earlier and meeting expectations. According to some crop scouts rapid drying may continue in many areas outside of the northwestern Corn Belt through Saturday as temperatures remain warm to hot. Forecasts are calling for little to no rain of significance before a welcome period of milder temperatures occurs Sunday through next week. Brazilian farmers are expected to harvest a bigger second corn crop this season than previously forecast, based on a recent crop tour conducted by Agroconsult. Brazilian farmers are now expected to reap 89.3 MMT of second corn, more than the 87.6 MMT forecast in May. Technically, December futures chart postured turned more bearish in my view as the contract closed under its 40-day moving average, currently $7.14, for the second straight day. Grain futures upside momentum has slowed substantially over the past week, and further declines in wheat markets could weigh on corn. In my view I think the trade will want to see the planted acres report at the end of month and verify July weather, before any sizable downward move is to occur. No trade recommendation in this post.
Trade Ideas
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Risk/Reward
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