After plunging $1.45 in just nine days (since June 21), December corn has stabilized and is consolidating in a sideways but small range. The catalyst for the erosion in prices was the much-higher-than-expected corn acres on USDA's June stocks and seeding reports 94.1 million acres. Exacerbating the weakness were the timely rains we have seen cover some of the Corn Belt in the last week or more. The 94.1 million acres planted would give us a shot at a more comfortable 2.2 billion bushel (bb) ending stocks number for 2023, even with a much-anticipated reduction in yield on Wednesday's USDA report.
The market is becoming somewhat oversold and perhaps due for a bounce. Complicating such an outlook is the fact that it looks like December could be forming a bear-flag chart pattern, potentially signaling that lower prices are ahead. The extent of weekend rain coverage, and Monday's crop progress report for corn, will go a long way in determining which way this market may go.
Wheat futures, including Minneapolis new-crop September, have been trading in an erratic, back-and-forth pattern. Holding wheat down despite the lowest ending stocks in 16 years has been aggressive selling by Russian exporters.
With both the Dakotas, Minnesota, and the Canadian Prairies impacted by warm and dry weather, with the outlook for that to continue in the next two weeks and only spotty moisture forecast, we could continue to see spring wheat conditions move lower. On the chart for Minneapolis September is the appearance of what might be a bull-flag chart pattern, suggesting we could soon see a run at the $9.00 level again. Monday's crop progress report could be the determining factor, along with the Wednesday USDA report. A rally and solid close above $8.67 on Minneapolis September could get the bullish ball rolling. We shall see.
Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of grain and soybean futures involve substantial risk and are not suitable for everyone.
Dana Mantini can be reached at Dana.Mantini@DTN.com
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