Analyst: Corn Market Leaning on Crop Rating Expectations
Active support was seen Friday as weather maps suggested active rains on days 6 through 15 on both the morning and noon updates. Corn already had a slight bullish bias expecting Tuesday's report to start with a low GTE rating, but Friday added reason to expect that wherever the GTE rating starts it won't be seeing much improvement anytime soon. Of course we need to keep in mind that these are weather maps ahead of a 3-day weekend and these can change drastically by the time trade resumes Monday night.
For now, trade put in support on wet areas continuing to see more rain in the forecast. This support was found despite the fact that beans were on a grind lower all day Friday, which might have limited the corn bounce somewhat on Friday. Corn continues to find active support on the expectation that ratings will start low. Bulls will need to see that be the case, if ratings come in average then a continued bean grind lower could take corn with it at least to the low end of the trading range.
Tuesday should find support being close to the first GTE rating, but it will also see heavy influence from weather maps and how beans are trading once we return from the long weekend. Longer term, that first GTE rating will go far to set the stage towards suggesting if corn will break out of the recent range or if it will take major summer weather to do so.
- It should be said again that the #1 issue will be Tuesday's GTE rating.
- Bulls will be looking for a rating that at least suggests moving close to the top side of the range so any additional lower ratings will cause a breakout.
- Rain will continue to be seen as a bullish issue unless things finally dry off and we first see a GTE rating increase from dry weather.
- Beans offered spill over pressure today even if it could not be easily seen from the way corn traded Friday.
- Bean charts offer a large downside potential to keep spill over pressure as a potential multi week issue.
- Bears will look for a GTE rating that is just "average" in order to take some excitement out of this range and begin following beans.
Rich Nelson | Allendale Inc. | 815-578-6161
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