Support Tested, Spreads Widening

Support of 349 in Sep corn is being tested. A break of that level sets us up for downside risk to 332. Support on the weekly chart is 301. Producers holding old crop corn should be patient because of the oversold market condition but cautious. The oversold condition begs you not to sell but the more powerful market signal is in the futures spreads. The December 17: March 18 spread has widened from 8 cents in early June to 12 cents today. That indicates the market is in no hurry to buy stocks on hand. It is also an indication that the market is satisfied with the 2017 crop size. The futures spread is telling you that the market does not want corn now but unless you already have a hedged position it does not provide you with income for storing the crop.

December corn is trading 364 with a downside target of 359, the contract low. We advise no sales here.

November soybeans support is 920 with downside risk to 907. Those holding old crop stocks should sell now. No new crop sales are advised.

December wheat broke support and is trading 416. Downside support is at 398 where we also see long-term trend line support. US and World stocks are burdensome and there is no reason to believe we will see support in this market until US farmer planting intentions are more clear. There will be a negative market reaction to any sense the US farmer will increase 2017 seedings over the historic low seedings we saw in 2016.