Commentary
December corn futures closed trading around $6.07, near the middle of the range for the past two weeks. Weekend rains fell in some key areas and grain shipments continue out of Ukraine Black Sea ports, headed for Turkey, Italy, and China. Minnesota got widespread rains while about fifty percent of Iowa needs rain, although state good to excellent ratings are ok. Nebraska dryland crops are said to be in bad shape. The USDA in my opinion is not likely to make any big adjustments or downgrades on Friday’s 11am Central WASDE report. Then again that’s when the market could see surprises. Informa pegged corn yield at 176.9 bushels per acre, in line with the USDA at 177 BPA. The USDA reported a private sale of 120K MT for delivery to “unknown” destinations during 22/23 and 105K MT for delivery to Italy in 22/23 marketing year. Europe is enduring the worst drought in over 50 years and Ukraine’s ability to supply corn has been greatly reduced. It is very rare to see Italy on the sales log, but there are EU GMO exceptions due to the war. Meanwhile, concerns continue to rise regarding hot dry conditions in southern and western Europe, where the corn crop is expected to see substantial yield reductions. That is expected in my view to increase wheat feeding, along with some potential corn imports. We’re also seeing increased chances that India may import wheat. Will this trend continue with EU orders from the US in 22/23? Weekly export inspections were the lowest in 46 weeks, reported at 555,620 MT vs the average trade guess of 925,000 MT. Technical levels for December 22 corn come in as follows for this week in my view. Initial support is 599. A close under and next support is 593 and then 587. Resistance is up at 623. A close over could push prices to 644 and then 652 in my view.
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