Corn bulls are talking about more complications in Europe, continuing uncertainty in the eastern part of the corn belt, especially IL, IN and OH, and some recent arising heat and dryness concerns out in the western corn belt. Bears continue to sight improving weather conditions in eastern areas of the U.S. and continuing concerns about stiffer competition from South America, especially Brazil where corn is thought to be $10 to $20 cheaper per ton than U.S. offers.
Technical traders are still thinking major chart support is somewhere between $3.90 and $4.00. I suspect if the weather forecast appears to improve over the weekend, we could come in next week and test those sub-$4.00 support levels.
On the flip side, if the weather guru's start to see more signs of uncertainty over the weekend we could push back closer to the $4.30 level. Look for Sunday night's open to set the pace, followed by the latest USDA weekly crop condition update Monday afternoon, where most are looking for a light improvement. I'm thinking we're working down towards the lower end of the summer range, so as a producer I want to remain patient and look for better opportunities to reduce additional price risk.
Keeping Our Eye On Brazil
There's more talk that Brazilian corn is now being booked into the U.S. via the east coast. The talk is the earliest cargo could arrive within 30-45 days. The weakness in the Brazilian real vs. the strength in the U.S dollar is driving this situation. There's also some talk that Brazilian corn is starting to work it's way into Europe. The only real positive is the fact there is more talk about fewer corn acres being planted next year in Brazil. From a political standpoint, the approval rating for President Dilma Rousseff has plunged to new lows amid Brazil's economic troubles and the huge corruption scandal at Petrobras - A poll released Tuesday by the MDA polling institute said only 8 percent of Brazilians surveyed consider Rousseff's government to be "great" or "good." By contrast, 71 percent said the government is now considered a "failure." (Source: Associated Press)