Corn futures rallied 3-4 cents as the market is highly skeptical of NASS’s first pass at the 2017 US corn yield. There’s little doubt that corn yield will be lowered in September, but and the debate will be one of degree. ARC outlined in this evening’s wire that there’s still more than ample evidence to suggest national yield will be at/below 165 Bu/Acre, but we all now wait field/harvest data. Note, too, that the heart of the Corn Belt will be without meaningful rain for another 6-7 days. Crop conditions will decline
Managed funds as of Tuesday were long a net 67,000 contracts, vs. 107,000 in late July. But the sum of all speculators’ position is now flat, and so many recently established longs have exited.
Moving forward, South American basis and crop conditions will drive price determination, and so far Dec has held major chart-based support at $3.70. We caution against turning overly bullish or bearish. Our strategy is to sell strong rallies in what we see as a broad trading range.