Grain Spreads: King Corn

Sean LuskGeneral Commentary


USDA pegged September 1st corn stocks (2021-22 ending stocks) at 1.377 billion bushels. This was 135 million bushels less than traders expected. The average trade guess was 1.525 billion bushels. This suggests that feed usage has been larger than expected in my opinion. USDA also revised the 2021 corn crop down 41 million bushels.

The outlook for tight supplies through 2022-23 is supportive long-term in my opinion, but near-term risks may lead to the downside, with outside markets and speculative money among the keys to price direction ahead of USDA’s next Crop Production Report on Oct. 12. In my opinion uncertain global economic and geopolitical backdrops and the U.S. dollar’s continued strength driven by broader global currency turmoil are among the issues that may stop corn from trading above $7.00 in 2022. Couple those worries with escalating recession concerns, that poses considerable bearish headwinds for corn facing increasing pressure from the accelerating U.S. harvest. Technical levels for December Corn come in as follows for next week. Resistance is up at 680.4 and then 6.87. A close over 6.87 and its 7.12 then the gap up at 7.28. Support is just below todays close at 6.75 and then the 50-day moving average at 665.4. A close under the 50-day moving average and the next level of support is at 6.52. A close under 6.52 and the market could push down to 6.34.

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Sean Lusk

Vice President Commercial Hedging Division

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