Also been bid sitting for awhile. Looks like more downside, but can't see too much more. I'm not knowledgeable about corn so merely a chart play since there is so little news.
I'm sure you've seen the SA article. If not here it is, without about a dozen charts and graphs, together with comments.:
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Corn Market Is Likely To Rally
Aug. 21, 2016 7:34 AM ET|10 comments | About: Teucrium Corn ETF (CORN) Oleh Kombaiev Oleh KombaievFollow(212 followers)
Summary
The U.S. corn yield forecast at the level of 175.1 bushels per acre is probably too optimistic.
The incident that took place in 2010/11 reminds that substantial deterioration in conditions for corn crops is possible in the following 3 months.
The forecast indicates a high probability of drought formation in key U.S. corn producing regions.
According to current USDA forecast, the U.S. corn yield in 2016/17 will reach a record level of 175.1 bushels per acre. This factor, as I showed earlier, was the main reason for corn futures price reaching a seven-year low in the beginning of this month.
A strange thing is happening: record crop has not yet been harvested but the market has already dropped, although there's still enough time for the weather to cause corn yield reduction in the United States. In my opinion, this could potentially lead to the corn market rally in the nearest future.
The August corn yield forecast, published by the USDA, is more trustworthy, but as history shows, the situation may still change drastically.
The 2010/11 marketing year in the United States is a great example. In June that year, the USDA assessed the final U.S. harvest at the level of 163.5 bushels per acre. In August 2011, the USDA raised its corn yield forecast for 2010/11 to 165 bushels per acre. However, as a result of the prevailing dry weather in key corn growing regions at that time, the final yield fell below 153 bushels per acre, i.e. reduced by more than 7%.
Source of data: USDA
A similar scenario, in my opinion, could likely repeat in the current year.
The key corn producing regions in the United States are West/North Central Iowa and East Central Illinois. You should pay particular attention to these states, analyzing the following weather change maps.
Here is a U.S. drought map provided by the United States Drought Monitor on June 14, 2016 - the date the USDA published its first official U.S. corn yield forecast for 2016/17:
And here's a similar map from August 16 (four days after the publication of the USDA August forecast):
Note that the drought on the border of Wyoming and South Dakota has intensified and expanded. The key corn producing regions are outside the risk area so far, however, the deterioration trend exists.
The next weather forecasts also do not give grounds to believe that the situation will start to improve.
Here is the weather forecast map for the next 30 days from AccuWeather.com:
Source: AccuWeather.com
And here's the forecast until August 23 from the National Weather Service:
Source: National Weather Service
The last map clearly shows that the area of increased temperature shifts towards Iowa - the key U.S. corn producing region.
It is worth noting that the latest assessment of the corn crops condition, performed by the USDA, pointed to a decline in the proportion of crops rated "good" and "excellent". Perhaps this is the first sign of deterioration.
Source of data: USDA
Conclusion
I would like to emphasize once again that the record rates of the U.S. corn exports maintain the price stability. However, in my opinion, the market totally ignores real weather risks that have all chances to materialize.
On August 22, the USDA will publish its regular review of the condition of corn crops in the United States. In my opinion, in case if the condition of corn crops continues to deteriorate, there will be good reasons for opening a long position in this market.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in CORN over the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Comments (10) Track new comments
redbaron Comments (925) |+ Follow |Send Message There are several reasons the crop estimate continues to go up for this current crop year. 1) Rainfall in the major corn growing regions has been plentiful, and most of the crop is in optimal condition. 2) After the drought in 2015 that negatively affected yields, drought resistant varieties were developed, with shorter maturity times. 3) Growing conditions have been optimal, resulting in the crop maturing faster this year. Some farmers in the center of the corn belt are now reporting that the harvest will be earlier this year, with the ear drying while the stem is still green, a situation rarely seen by growers. 4) The June crop report map pictured above, shows drought area in the 3 state area of W. Central IL, SE Iowa, and NE MO, but that situation was temporary and resolved with rainfall shortly after that was published, and crops there are now superb. Generally, a bumper crop means lower prices, and that seems to be what is happening in our section of the corn belt. 5) USDA crop report maps now seem to support this view. 6) Generally, a bumper crop means lower prices, and that seems to be what is happening in our section of the corn belt. 5) USDA crop report maps now seem to support this view. 7) Not much corn grown in the drought area you note on the border of SD & Wyoming. Overall, we here in the corn belt see a larger crop and lower prices, so we disagree with the direction of your opinion. How do other growers see the situation? Our crop is already 'made', and it will be superb. 21 Aug 2016, 08:05 AM Report Abuse Reply 2 Like
dani_92_bdn Comments (7) |+ Follow |Send Message So maybe is good idea buy against the market? ( i dont know how to say in english when you buy a share thinking that the price will drop). Better info than a crop grower cant be given ! 21 Aug 2016, 10:06 AM Report Abuse Reply 0 Like
Oleh Kombaiev , Contributor Comments (85) |+ Follow |Send Message Author’s reply » Thanks. Very deeply. Let's see what is the market's next move 22 Aug 2016, 02:46 AM Report Abuse Reply 0 Like
Faloh Investment , Contributor Comments (160) |+ Follow |Send Message Here you go, Dani_92_bdn. "buy CORN against the market" = "Short sell CORN; "Buy Put Option" If this helps you, check out my articles sometime :) 22 Aug 2016, 04:23 AM Report Abuse Reply 1 Like
TampaDirk Comments (193) |+ Follow |Send Message It just rained like 4 days straight from Nebraska to Minnesota and across the Midwest and the corn is already higher than my head 21 Aug 2016, 09:41 AM Report Abuse Reply 1 Like
jacquek Comments (2) |+ Follow |Send Message Are you a basketball player? Iowa corn should have been 7' before the end of July - former Iowa farmgirl 21 Aug 2016, 11:54 AM Report Abuse Reply 0 Like
faridul alam Comments (2) |+ Follow |Send Message Good prediction... 21 Aug 2016, 10:05 AM Report Abuse Reply 1 Like
faridul alam Comments (2) |+ Follow |Send Message good prediction 21 Aug 2016, 10:00 PM Report Abuse Reply 0 Like
Oleh Kombaiev , Contributor Comments (85) |+ Follow |Send Message Author’s reply » will see 22 Aug 2016, 03:29 AM Report Abuse Reply 1 Like
TampaDirk Comments (193) |+ Follow |Send Message These old time farmers got big time rich over the last few years off corn. Land is selling at crazy prices all over the Midwest, these new young farmers are trying to come in and profit also but the tides have turned and the young farmers will have to pay there dues with low prices until the next cycle which will be a long time and only a few dedicated farmers will survive and get rich like these did. 22 Aug 2016, 10:22 AM Report Abuse Reply 0 Like chmcnfunds Before you comment, why not add your picture? Add Your Comment:
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