MarketsFarm — Corn contracts have tested contract lows on the Chicago Board of Trade, and markets are in need of a bounce.
“If contract lows get taken out, you’re talking almost another 10 cents to the downside,” said Steve Georgy, president of Allendale Inc. at McHenry, Illinois.
“It’s going to be very important for us to see a bounce.”
With a trade deal between the U.S. and China far on the horizon, perhaps not until after the November 2020 election, markets are watching weather forecasts for direction.
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U.S. grains: Corn rebounds from contract lows on short covering, bargain buying
Bargain buying and short covering lifted U.S. corn futures on Monday after the market slid to contract lows on expectations for strong U.S. output, traders said.
Delays in crop maturity for both corn and soybeans could potentially re-introduce a weather premium to prices if an early frost threatens harvest.
“The weather is going to be the biggest turning points with the cooler temperatures moving in for the month of September,” said Georgy.
“That sort of animosity could end up giving a rally to grains prices moving in for the month of September,” he said. “I expect to see higher prices moving into September.”
Frost in key growing areas could cause markets to “go crazy,” he added.
“We could see them back up near contract highs, whereas right now we’re testing contract lows.”
— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.
