Corn and soybean markets continue to slide lower to wrap up what has been a discouraging week for the trade. December corn and November soybeans are lower by 27 and 50 cents per bushel respectively as I type this. What is to blame for the weakness you may ask? Well, the “Pro” Farmer tour hasn’t exactly been “Pro” grain prices this time around. All jokes aside, the market has been paying close attention to the highly anticipated yield estimates we’ve been given this week, and they’re not bullish. Iowa, Illinois, Indiana, Nebraska, and Ohio are all estimated to grow more corn bushels this year than last. And if you’ve been on “ag twitter” no doubt you’ve seen the photos circulating of just how good the crops look. In short, we’re finding more production out there than what we thought after last week's USDA report (at least according to Pro Farmer). Bulls in the market are going to need some fresh feed to bounce back from this week’s findings or else this trend lower may be here for a while longer.
A few more things we’re watching heading into the weekend are light trade volumes and rain chances. A lot of traders are sitting on the sidelines these days waiting for better direction on national production before they take their positions for the year. When liquidity is low, we realize big swings in the markets for not very much reason at all. Many in the trade believe low CBOT volumes are also contributing to commodity weakness. Hopefully, as we roll into harvest volumes pick up and we’re able to determine true fair market value a lot easier.
Rain chances remain in the forecast for much of the western corn belt over the weekend. If moisture is actually realized, it’s going to be viewed as positive for both corn and soybean production. If we’re going to have a shot at flipping the script on this week’s lower trend, rainfall totals will need to be light, or showers will need to dissipate. I don’t wish that on anyone, but again, as our production is viewed as “growing” it's going to become harder and harder to find support.
Corn down 2-5