Corn bulls are hoping the recent strength in wheat might pull the market higher. There's also some talk of position squaring ahead of the extended Labor Day weekend and end of month. From a historical perspective, the U.S. corn market has often posted its lows between mid-August and mid-September, so there's some hope that the bleeding could soon be over.
Bears argue there's still more room to downside, especially if the U.S. crop is confirmed by the USDA to be getting larger not smaller. We also have to keep in mind there's early talk inside the trade that Argentine producers are going to plant more corn acres and that U.S. producers will be planting significantly more corn acres in 2019.
As we all know, planting is only the first step in the equation. Ultimately weather will be the determining wild-card, but with none currently in play, the bears are left to swing freely, talking about more acres and adequate supply. From a technical perspective, the $3.50 area remains heavy psychological support for the DEC18 contract.
If we were to close below that level, I suspect we would see more short-side interest come into the marketplace on a bearish breakout. As a producer, I continue to hear more talk of a weakening basis, with the national corn cash price going for around $3.25 per bushel.
The opinions of the author are not necessarily those of Corn+Soybean Digest or Farm Progress.