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Trade Eyes Next Week’s WASDE Report

Very calm trade was seen today both from a lack of news and possibly from other activities occurring in Chicago today. Average estimates for yield and carryout were posted this morning with analysts suggesting a 173.2 yield and 2.300 carryout. That hints at a slightly bullish report with last month’s carryout coming in at 2.320. With that new carryout estimate, the December has moved slightly away from a middle-of-the-road price of 342 and has turned slightly bullish closing at 348¾.

This close is fitting with the analysts’ estimate numbers seen today. With some traders cautious due to the upcoming election while others are cautious due to the USDA report next week, there is plenty of reason to see corn trade sideways for the short-term. Long-term is still based on demand remaining strong. While ethanol has little reason to slow due to any upcoming issues, there are at least some thoughts that an election where Trump wins could mean a slowdown of Mexican purchases of U.S. corn. That is likely far more fear and true reason to be concerned, but is still something to watch longer term.

Bulls

  • Analysts’ estimate for carryout came out today at 2.300 compared with 2.320 last month.
  • Bulls will still be looking for an increase in both ethanol and export demand, which could cause an even lower carryout than seen above.
  • Any level under 342 in December might be seen as a buy for bulls looking for a bullish report next week.

Bears

  • Bears will be looking for a larger yield increase on next week’s report, which would be seen as disappointing from this current price level.
  • Even a neutral report could cause a setback to the uptrend support line, which is still down close to 337½.

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

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