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258947

Corn Market Awaits First 2017 USDA Crop Ratings

A quick bounce back was seen after the Brazilian story from Thursday cooled off, sending the July corn right back up to first resistance. As a quick reminder, the first small hurdle that corn bulls will want to see taken out is 374, which July came close to today posting a high of 373. Support appeared to outpace what was seen in beans on a comparable basis, which might also suggest that some light fund short cover was also seen Friday. Even with that added support, July was unable to clear that first technical hurdle which would then open up the range to the more commonly traded high up to 379 1/2.

It still appears unlikely that we will be seeing the first corn GTE rating on Monday, but we should note that it is possible. Once corn hears when the first GTE rating will be released, we can expect at least some pre-buying of that report expecting a low starting number. Short-term, we will want to keep a watch out for additional headlines from Brazil, but can expect a more limited reaction from that news front. More importantly, we'll see if there will be a GTE rating Monday or more likely wait until next Tuesday to see that first rating.

We also need to keep track of the funds even if they are slowly trading this market given that the last COT report showed funds not far from record short. Let's see what Friday afternoon's report shows for their position. Until larger news is seen for this market, we can still expect the sideways range to continue even if it opens back up to a top side of 379 1/2.

Bulls

  • Bulls will want to hear on Monday that the first GTE rating will be that afternoon to encourage some pre-buying of the first rating report.
  • If the ratings will hold off another week, buyers will want to wait for another pullback into the 360's before getting too active.
  • It was a good sign to see July take out last week's high, but the first hurdle to get past to the upside is still 374.

Bears

  • Today's settlement at 372 1/2 is still a target for short-term sellers to stand in risking just past the 374 first resistance.
  • If Brazil makes more headlines over the weekend, there is a chance at another grind back down to mid 360's support.
  • Bears will be looking for the bean planting pace to beat expectations on Monday to offer spillover pressure in the corn market.

Rich Nelson | Allendale Inc. | 815-578-6161

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