Corn market needs a correction, analyst says

China demand supports tighter stocks long term.

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.

Market Ideas

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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For daily updates on cattle, hogs, corn, wheat and the soy complex, visit hightowerreport.com.


*** This report includes information from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made and we do not guarantee its accuracy or completeness. Opinions expressed are subject to change without notice. Any information or recommendation contained herein: (i) is not based on, or tailored to, the commodity interest or cash market positions or other circumstances or characterizations of particular investors or traders; (ii) is not customized or personalized for any such investor or trader; and (iii) does not take into consideration, among other things, risk tolerance, net worth, or available risk capital. Any use or reliance upon the information or recommendations is at the sole discretion and election of the subscriber. The risk of loss in trading futures contracts or commodity options can be substantial, and traders should carefully consider the inherent risks of such trading in light of their financial condition. Any reproduction or retransmission of this report without the express written consent of The Hightower Report is strictly prohibited.

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