Corn ended lower with soybeans slightly higher on Wednesday.
Mark Schultz, Northstar Commodity, says corn had a poor technical close making new lows and with December closing below $4 for the first time since December 2020.
“It was concerning to see corn post new lows today taking out $4.03 on the December contract. We actually accelerated a little bit more and went down another 5 to 7 cents. So to me the market is still on the negative side and I think another lower close tomorrow probably opens the door to September corn maybe $3.50 to $3.65 and I can see the December corn down to the $3.75 to $3.80 level before we find the next level of support,” he says.
Schultz says unfortunately corn is still missing out on demand even though the U.S. has some of the cheapest corn in the world.
So how low do prices have to go to stimulate consistent demand?
According to Schultz corn prices may have to go down to $3.50 to $3.60 per bushel to get more of the export business.
Soybeans also make new lows before closing slightly higher on end of month profit taking and short covering.
However, Schultz says $10 is vulnerable on November soybeans with favorable August weather and slow U.S. exports, especially for new crop.
“Our new crop bean sales are off to the worst start in 13 to 14 years. If you’re going to change the dynamics you’re going to have to have the Chinese come in and do some 30, 40, 50 million bushel purchases,” he says.
Without a change in either supply or demand Schultz says funds will continue to sell both corn and soybeans.
