CORN: If Bottom In Place, Should Not See Close Under 508 1/4.
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With the 8-14-day forecast models showing normal rain and outside market forces bearish, sellers are active this morning. December Corn traded sharply lower yesterday and gave back most of Friday's gains, and it is lower again this morning. Ideas that the crop will recover if normal moisture returns to the Corn Belt into mid-June helped pressure the market. Demand factors have been negative, and weakness in the other grains has added to the bearish tone. After very little rain in the Midwest in the last two weeks, it looks like 1/10 of an inch or less will fall on the eastern half of Iowa, much of Wisconsin and Illinois, and parts of Indiana. The 6-10-day forecast calls for above normal temperatures and below normal precipitation, but the 8-14 day calls for normal precipitation.
The weekly Crop Progress report showed that 98% of the US corn crop was planted as of May 28, up from 81% the previous week, 84% a year ago and above the 10-year average of 88%. The average trade expectation going into the report was 92%. Of the top producing states, Iowa was 98% planted, up 3% from last week, Illinois 95% (+4%), Minnesota 93% (+13%) and South Dakota 92% (+16%). For the first conditions report of the year, 69% of the crop was rated good/excellent (G/EX) versus 73% a year ago. The average trade expectation going into the report was 71%. Poor/Very Poor came in at 5% versus 4% last year.
US corn export inspections for the week ending May 25 came in at 1,313,411 tonnes versus expectations for 600,000-1.4 million. Cumulative inspections have reached 64% of the USDA forecast for the marketing year versus a five-year average of 69%.
MARKET IDEAS
Traders are hoping for normal rainfall in the 8–14-day time frame. Close-in support for December corn comes in at 508 ¼. A close below that level would turn the charts bearish. Resistance is at 533 ½ and 543 ½.