Based on price history since 1997, the July Supply–Demand report suggests corn prices between $3.60 and $4.10 until the August report, according to Bill Fordham of C&S Market Consulting. He used the average of USDA’s price range for each monthly report and plotted it as a horizontal line at 100%. He then plotted December corn futures’ highs and lows as a percent of that 100% value.
However, Fordham notes that, as you might expect in the key growing season, although there is a high correlation between the opening price the day following the report and the price range, the volatility following the July report is high.
Fordham sums up his research this way: “Based on chart patterns, history and mathematical computer projections, the December 2010 high between now and the Aug. 12 WASDE report could be somewhere in the $4.10 area +/- 10¢ and the low, in the $3.60 area +/- 10¢.”
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