Weekly Corn Market Update 11/01/24

Written By James Schroeder

December 2024 (Dec24) corn futures (the benchmark for 2024 corn production) finished the week lower by 0.75 cents (~0.18%), settling at $4.1450/bushel. This week's price action occurred in a 6.50-cent (~1.57%) range - posting the narrowest weekly range of the year. All of this week's trading occurred within the unremarkable band we published last week.

Our corn demand index (CDI) fell 1.32% this week, underperforming Dec24 corn futures. The war in Ukraine, executive branch policy, tensions with China, Federal Reserve interest rate policy, the Dollar, instability in the Middle East, the upcoming U.S. presidential election, and the potential for tariffs remain concerns. Next Tuesday is the U.S. presidential election, and next Friday, the USDA releases its World Agricultural Supply and Demand Estimates for November (WASDE).

Dec24 corn futures remain well below a long-term downtrend channel capped by a trendline connecting the highs of April 20th, 2022, and June 21st, 2023, and initially supported by a trendline connecting the lows of July 22nd, 2022, and May 18th, 2023. We see technical levels below the market at about $4.14, $4.04, $3.99, $3.90, and $3.85/bushel. We see technical levels above the market at about $4.25, $4.41, $4.57, $4.73, $4.86, $5.01, $5.14, $5.25, $5.44, $5.76, $5.90, and $6.02/bushel. Most daily and weekly momentum indicators are in neutral territory. Carry spreads from Dec24 to Mar25, May25, and Jul25 widened this week.

Our at-the-money model volatilities for the 2024 crop finished mixed this week. Week-2 and Week-3 were firmer ahead of the elections, and next week's WASDE release, Dec24, and behind, finished softer. See the charts below for more details. One compares our closing at-the-money model volatilities for this week and last. The other compares our current model volatilities with the forward volatilities they imply between consecutive expirations.

For next week's trading in Dec24 corn futures, we consider trade in the $4.0275-$4.2675 per bushel range unremarkable. Notable moves extend to the $3.8025-$4.5200 per bushel range. Price action beyond that would be extreme.

This week, the fall crop insurance price finished its discovery period, settling at $4.16/bushel.

This is our last Weekly Corn Market Update for the 2024 crop year. We’ll return with an improved version for the 2025 crop year after the new year.

Speaking of the 2025 crop year, if you haven’t started making your 2025 marketing and risk management plan, now is the time. Give us a call if you’re interested in exploring your options.

Thanks for taking the time to read. We look forward to your questions and feedback. Thanks again.

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Weekly Price Levels and Corn Demand Index

As a reminder, the Quartzite Risk Management Corn Demand Index references the weekly change in April 2025 futures for Crude Oil, Live Cattle and Lean Hogs. We weigh the percentage change in those contracts and compute the index's percentage change. Crude Oil accounts for 50% of the index, and Live Cattle and Lean Hogs each make up 25%. To create the chart, we started the index at the Dec24 corn futures settlement on 11/10/23; then added or subtracted the index's weekly percentage change. We want to add a few warnings. First, there are only a handful of data points - not much to go on. Second, the index references relatively illiquid markets - making any strategy based on it challenging to execute. Third, we expect divergences to increase as we get into the growing season when the corn market will likely look more toward supply for its direction.

In short, we would not attempt to trade on this information without much more data, nor would we recommend anyone else does.

Model Volatilities

James Schroeder
Next

Weekly Corn Market Update 10/25/24