December Corn finally pushed through resistance at 500 this week after numerous failed attempts, to reach its highest level since August 2. The US corn harvest should now be well past the halfway mark after the mostly favorable weather this week. Forecasts for the middle of next week and the week following indicate a change to a more active precipitation pattern, which may slow the harvest pace for the final third of the crop. There is usually very little attention paid to the US Drought Monitor at this time of year, as the crops are nearly in the bin. But as you can see from the accompanying map, significant drought has developed across the southern US, and pockets of very dry soils remain in the central Corn Belt. These conditions will be monitored over the winter, as significant increases in subsoil moisture will be needed before spring planting. Important rains are slated for Argentina and to a lesser extent northern Brazil next week, and if coverage and amounts are significant, corn may run into renewed selling by the funds. For now, there is a solid, 2-½ month base of trade on the December Corn chart that could support any reasonable breaks on a run to the 530 area.
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Originally Published October 20, 2023
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