Corn Tech Update
Grain Market Commentary
Wednesday, August 14, 2019
by Jacob Christy, Freedom Program Trader, The Andersons
Corn prices slid again today as the fallout from Monday’s USDA crop report lingered. Dec19 futures have dipped to within eight cents of contract lows as fund selling gripped the market for a third consecutive day. Bargain buyers have been absent, given no reason to step up. With contract lows in sight will trade respect the old lows, or has the rebalance just begun?
The market filled a reversal gap from Mid-May yesterday, and attempted a recovery effort overnight. That effort was in vain as gains were washed out by early this morning. Dec futures went on to score a contract low close today. Volume has waned since Monday and the market is deeply oversold, but for now the corn complex might have to run out of sellers before it finds new buyers.
Prices have dropped 46 cents since Monday’s report release. The chart is a disaster. What little life the market has shown since Monday, has quickly been snuffed out. Despite an oversold condition, the market is in the midst of a paradigm shift. Until a new fair price is established, the path of least resistance is lower. If fund selling continues, new contract lows seem likely by weeks end.