Morning Market Review by Bryce Knorr
Futures are trading mixed this morning, ahead of USDA reports on grain stocks and the small grains summary.
Corn prices made new lows overnight, with December futures trying to confirm a break below the 38.2% retracement of its summer rally. While the nearby is testing the bottom of the downtrending channel that’s been in effect for the past month, further downside targets loom between the July 4th gap and the 100-day moving average from $6.76 to $6.87. The contract is only starting to reach oversold levels on momentum indicators.
Some of this week’s selling was likely due to fear that USDA will release another September surprise this morning with its Sept. 1 Grain Stocks estimate. Carryout adjustments the last two years were bearish, leaving traders to question whether the agency was comingling old and new crop grain. USDA made a concerted effort ahead of the report to convince analysts it was keeping the two years separate. And in a special report this summer the agency laid the groundwork for increased feeding of new crop in August that raised old crop carryout projections.