Corn market needs a correction, analyst says
The corn market is still under the negative influence of the technical reversal on Monday.
The corn harvest, as of October 11, was up 16% for the week to 41% complete. Traders had believed that corn harvest was close to 39% complete.
Crop Progress Details
The harvest is running 21% ahead of last year and 3% ahead of the 10-year average. The crop was rated 61% good/excellent (G/EX), down from 62% from the previous week and 64% as the 10-year average. Poor/very poor was 14%, up from 13% the week before.
Nebraska was 63% G/EX, up from 61% the previous week. Declining conditions were seen in Iowa at 44% (-1%) and Illinois 68% (-5%). The sharp drop in conditions for Illinois for corn and soybeans is seen as a positive factor for the market.
There are also rumors of China buying many cargoes of U.S. corn.
Exporters announced a sale of 110,000 tonnes of U.S. corn sold to Mexico. This helped offset a sluggish weekly export inspections report, which showed corn inspections for the week ending October 8 at 632,184 tonnes, below trade expectations for 650,000 to 900,000.
Cumulative inspections for the marketing year have reached 4,319,958 tonnes, which is 72.4% above last year. Inspections have reached 7.3% of the USDA’s forecast for the 2020/21 marketing year vs. a five-year average of 9.1%.
France’s Foreign Minister lowered its 2020 corn crop production estimate to 13.5 million tonnes from 14.1 million estimated last month. This would still be 6% above last year’s production.
Traditional technical indicators are extremely overdone, and the market is still under the negative technical influence of the reversal action Monday. Watch for a short-term correction with resistance for December corn at $3.95 per bushel and support at $3.79 and $.375.
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