Can corn break out of the current trading range?

By Jon Scheve, Superior Feed Ingredients, LLC

With harvest in full swing around the country, the markets are watching. 

Corn outlook

Corn rebounded off the lows last week, but still it remains in the tight trading range of $5.10 to $5.40 it has been trading in for seven weeks. Some of this can be attributed to the recent wheat price rally in this country. Also, for the first time in several months China’s domestic corn price is lower than the price levels of Chinese domestic wheat. This could cause a demand increase for corn for feed should the price trends continue. 

Corn yield reports throughout the U.S. continue to be impressive and suggest the national yield average could still increase. If so, this could be an anchor to prices. On the flip side, Argentina’s spring planting is extremely dry and the potential for upcoming weather issues from November through March could provide the corn market some upside potential. I expect corn will remain range bound at current levels until harvest is over and more is known about the growing conditions in South America.

Soybean outlook

U.S. beans are expected to have a very large harvest. Despite prices rallying nicely off the lows earlier last week and announcements for increased exports, the pace will need to improve more for prices to rally much further. Plus, there are concerns over Brazilian soybean values being nearly 70 cents less than U.S. prices for late February shipments and beyond. This could mean that beans will be range bound for the next couple of months between $12 and $12.50.

Please email with any questions or to learn more. Jon grew up raising corn and soybeans on a farm near Beatrice, NE. Upon graduation from The University of Nebraska in Lincoln, he became a grain merchandiser and has been trading corn, soybeans and other grains for the last 18 years, building relationships with end-users in the process. After successfully marketing his father’s grain and getting his MBA, 10 years ago he started helping farmer clients market their grain based upon his principals of farmer education, reducing risk, understanding storage potential and using basis strategy to maximize individual farm operation profits. A big believer in farmer education of futures trading, Jon writes a weekly commentary to farmers interested in learning more and growing their farm operations.

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