Corn (CME:ZCU14) Fundamental Support: Today certainly made it look like corn was moving back to the low volume grind lower. There was general pressure all day today without any large scale selling seen at any one time. As it stands right now there doesn’t look to be much reason to expect corn to fall apart or to bounce until we start to see some early harvest numbers. Seasonals would suggest that means continuing the sideways to slightly lower trade until mid to late September. Unless yield thoughts start to change away from 173 in either direction, we should expect to see more of the same for at least a while.
Old crop traders:
- Sep/Dec is stepping back slightly, possibly seeing some influence from a dramatic drop in old crop beans today
New crop traders:
- Corn is back to the same grind lower we have become used to seeing over the last month
- Weather continues to offer no threats of cold weather to help keep a lid on excitement for this market
- The next active move in corn might not be the Sep crop report but rather the first Midwest yield reports
- Continue sending in yield estimates, the more samples the more accuracy.
- Bulls might want to go back to buying market dips with bullish news generally quiet now
- A move down near contract lows can be an attractive level for buying with more active buying if new contract lows are made
- Continue to watch Ukraine news for days where wheat can offer light spillover support
- Until yield reports come in, bears can continue selling bounces up near 370
- It may seem that no news could push corn under contract lows but trade has shown to NOT be getting more bearish until starting to hear actual yield results
- Quiet days still are on the side of the bears but don’t look to get too greedy with expecting a sudden breakout lower
Wheat (CME:WZU14) Fundamental Support: Wheat finished lower today after little escalation in Ukraine. There was talk of an additional humanitarian mission by Russia for Ukraine but we have not seen any confrontation between the two which is leading some to believe we are working towards a resolution. This market remains stuck in a technical sideways pattern and we wouldn’t expect to see it break out to either side unless we see a major event happen to push us. We wouldn’t expect this market to push much lower than here either as the shorts exposed in the market have more to lose on a bounce than they would expect to make on a further pullback. This would lead us to believe we could see some upside in the wheat moving forward.
Export inspections were within trade expectations but export bookings which are released Thursday are going to give us a better idea as to demand for this crop right now. Ratings for winter wheat are expected to drop 1% today as excess rainfall could be adversely affecting quality of the crop at this point. We are still expecting very good yields for spring wheat but with the excess amounts of rain we are seeing we could see some quality concerns moving forward. Look for sideways to slightly higher trade as the funds may cover shorts on concerns over Russia and Ukraine but right now upside is probably limited.
- Export inspections 558,113 tonnes within trade estimates of 425-550,000 tonnes