The Grain Report: Slowly Corn Matures

Corn:  Monday's Weekly Export Inspection Report showed 33.1 million bushels of corn was inspected by the USDA for near term shipment, down from 42.9 the week prior, 43 a year ago and the four week average of 39.2.  39 m.b. is the high end of the good demand range, 30 is the low end and of course over the 40 m.b. is Bullish- so 33.1 this week is a good near term demand signal but not a Bullish one.  This leaves supply side production fundamentals as our near term driving force.  After the close on Monday, our Crop Progress Report came out showing 68% of the projected 12.995 b.b. crop is in good to excellent condition down 1% from the week prior and the lowest rating this year.  However, we are well over a year ago of 59% and our ten year average of 57%.  This is a big crop even on the small weekly decline.  If we are another 1 or 2% lower in the next two weeks, it will give us an idea of what the October USDA Crop Report will say on production.  The key of the report is not quality but its maturing rate as the trade remains concerned about an early frost.  Only 21% of the crop was fully mature vs. 12 last week, 30 a year ago, and the five year average of 55%.  The trade was surprised and the small 9% increase in maturity on the week, especially after beans rose 23% on the week.  This lends the psychology that it is going to take longer to finish the crop and closer to a possible frost cutting production.  This had corn up 7 cents at todays mid session.  WXRISK.COM the weather site noted there is one weather projection model out of five that now sees a frost potential by October 1^st.  If others join in we can expect more buying.  This is what happened last week when two models screamed frost pushing corn and beans up limit on Tuesday, only to back off late week.  The December corn has resistance at 3.35 on Wednesday and support at 3.10.  A close under 3.10 sets up 2.88 as next stop.  To hit 2.88 we need to take all frost thoughts out of the market.  If we take out 3.35, buy as it would mean all the models are projected frost.  Needless to say, I can not predict the weather but believe a move under 3.00 is necessary to price in this large crop before harvest buying enters.