Sponsored By
Farm Progress

Will support levels hold for the corn market?Will support levels hold for the corn market?

Kevin Van Trump

September 27, 2016

4 Min Read

Corn prices have been edging lower as of late and many feel we are moving towards important support levels down between $3.15 and $3.25 per bushel.

Technical insiders fear if the market breaks beyond this point during the next couple of weeks or perhaps following Friday's upcoming USDA quarterly stocks report, there's a strong chance continued harvest pressure could eventually take us sub-$3.00.

I'm still not on the same page with the USDA in regard to yield, as they again elected to leave their crop-condition rating "unchanged" at a whopping 74 percent rated "Good-to-Excellent." 

I just don't think the boots out in the field are seeing the same thing as the eyes sitting behind the desks. I continue to field call after call from producers who are a bit disappointed after firing up the combine and getting deeper into the fields.

It's not that folks are reporting a terrible crop, it's just a bit less than expected and not a record yield. Many were counting on the extra bushels to help offset the lower prices, but that's just not been the case. The USDA estimated the U.S. harvest is now about 15 percent complete vs. the 5-year historical average of 19 percent by this date.

States lagging the furthest behind are: Kansas -11 percent behind their average pace; Iowa -7 percent; Minnesota, Missouri and Nebraska -6 percent; South Dakota -5 percent; Colorado, Michigan, North Dakota and Texas -3 percent; Wisconsin -2 percent;  Illinois -1 percent.

States running ahead of their traditional pace are Indiana and Pennsylvania +1 percent; Ohio +2 percent; North Carolina +10 percent; Kentucky +12 percent; Tennessee +18 percent.

As a producer I fear that nearby prices could continue to work themselves lower, hence I continue to keep my current hedges in place and have yet to re-own any previous cash sales. I believe we are getting closer to a bottom but the funds may still be unwilling to place many bullish bets. Meaning without a fundamentally bullish  weather story and or very little macro interest in adding additional "risk," I don't think we have enough horsepower or torque to pull us out of the current hole.

Longer-term that could certainly change, but for now the trend still fells like lower-highs and lower-lows. Especially, if the USDA data fails to confirm the same crop problems we are hearing about form out in the field.                                      GET THE DAILY VAN TRUMP REPORT HERE

About the Author(s)

Kevin Van Trump

Founder, Farmdirection.com

Kevin is a leading expert in Agricultural marketing and analysis, he also produces an award-winning and world-recognized daily industry Ag wire called "The Van Trump Report." With over 20 years of experience trading professionally at the CME, CBOT and KCBOT, Kevin is able to 'connect-the-dots' and simplify the complex moving parts associated with today's markets in a thought provoking yet easy to read format. With thousands of daily readers in over 40 countries, Kevin has become a sought after source for market direction, timing and macro views associated with the agricultural world. Kevin is a top featured guest on many farm radio programs and business news channels here in the United States. He also speaks internationally to hedge fund managers and industry leading agricultural executives about current market conditions and 'black swan' forecasting. Kevin is currently the acting Chairman of Farm Direction, an international organization assembled to bring the finest and most current agricultural thoughts and strategies directly to the world's top producers. The markets have dramatically changed and Kevin is trying to redefine how those in the agricultural world can better manage their risk and better understand the adversity that lies ahead. 

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like