Corn prices are up +20 cents from last weeks low as tensions with China appear to have eased and the USDA took a step towards trimming U.S. production. Bears however are quick to point out that an official deal with China is still off on the horizon and U.S. weather into early-October looks mostly cooperative. In other words, both of those headlines might now be somewhat exhausted. It will take a major weather hiccup to aggressively trim the U.S. yield from here. At the same time, it probably takes an “official” deal with the Chinese to add more trade premium with the U.S. balance sheet this burdensome at +2.0 billion bushels. Demand remains a huge question mark and something we will continue to monitor closely. There’s starting to be more talk among professional traders that the corn market could now be stuck in range. The lower end of the range being between $3.00 and $3.40, the middle of the range being between $3.40 and $3.80, and the upper end of the range between $3.80 and $4.20 per bushel. As a producer, I want to stay patient until we reach the upper range, then I will get more serious about pricing additional new-crop cash bushels. As a spec, I want to stay patient until we reach the lower end of the range.
If we can continue to add on last weeks gains this could be an important week for the bulls. If the market gives back the gains the bears could quickly come back up to bat. Pay close attention to how we trade overall this week, it could set the tone into harvest. I would much rather it be sideways-to-higher rather than sideways-to-lower!
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