Corn Futures Sink, Less Crop Damage Estimate

Corn futures sunk to lows not seen since July after the USDA revised domestic corn output estimates in today’s monthly crop production report.  The outlook reflected in corn futures prices is that corn output will decline, but less than expected following USA’s worst drought in more than a half century.

It is now foreseen farmers will realize nearly 10.75B bushels of corn, still down from 12.36B bushels last year, but the smallest corn crop in the past six years.  A recent corn crop survey revealed current conditions are the worst since 1988 with the harvest 15% complete (as of September 9th).

Bret Aaron, head of trading operations at Global Futures in Encino, CA, commented today regarding the current corn futures situation, “(Corn) Futures have moved to the lowest level since late July and the early low was 90 cents below the high printed minutes after the bullish USDA August report.”  Aaron added, “…this morning the yield number came in at 122.8 versus the expected 120.5 bushels per acre, so only a 0.6 bushel drop occurred. Total (corn) production was at 10.727, down only 50 million bushels rather than the 300 million decrease the market expected.”

The trend for corn futures is now DOWN.  Now that this major crop report is behind us, I will look for a pull-back in corn futures prices for a lower-risk trading opportunity

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