Corn traders are talking about a potential "double-bottom" type low possibly forming on the charts in the $4.45 area, a price we haven't seen breached in three-years. Even though there are talks about falling yields in many parts of the Corn Belt, the trade, at least for the time being, seems to be focused on the massive yield reports coming out of the delta and southeastern regions of the country...where 225 and 250+ yields are being reported!
There is also a lot of talk of farmers harvesting corn earlier and at higher moisture levels than normal across the belt as they try and deliver against the inverse and avoid any late wind, hail or frost damage. With this being the case it's hard for the trade to envision a national yield below 150 bushels per acre or the sub-145 number that is needed to spark any serious bullish interest amongst funds. As each day passes hopes of a "production" type rally gets smaller and smaller.
Eventually the trade will flip the page and start to focus more attention on demand. The bears will argue demand is currently overstated, but from my perspective that will be extremely relevant to price. If prices push down closer to $4.00 I think demand, especially from China, is going to pick back up in a big sort of way. I am also thinking ethanol demand could be a real surprise to the upside. Moral of the story: As the U.S. growing season starts to wind down, the odds of a supply side rally will become more fleeting and a bullish demand story could take a while to develop, hence a sideways to lower channel looks to be the theme nearby.
Don't forget next Thursday is September USDA report. Even though very few seasoned traders give much credence to the Sept numbers there seems to be a consensus that yields for both corn and soybeans will be tapered back. There is also some talk that harvested acres could be reduced as well, a number I don't think will be changed until the Oct report, after the FSA numbers are digested. I suspect the Sept USDA report to be somewhat of a non-event...with much more bark than bite. In fact several in the trade think it will mark the lowest yield estimates of the year by the USDA, as the harvest numbers will turn out to be better than expected.