Today’s Spotlight Market
A look at the Commitment of Traders report for Corn futures/options shows a battle between large speculators holding a net-long position and commercial hedgers and small speculators on the other side of the trade.
Fundamentals
Despite a record Corn harvest this year, Corn futures price have rallied to 5 month highs as traders believe Corn demand will be robust in the coming months. One reason for the optimism for Corn demand is the thought that China will reconsider restrictions it has in place on China importing U.S. Corn on concerns that supplies may contain some genetically modified strains that have not yet been approved. In addition, the continued turmoil between Russia and Ukraine may affect Ukrainian grain shipments, which could send additional business to the U.S. Current price differentials for cash Corn vs. Soybeans, could see producers dedicate additional acreage towards Soybeans this coming crop year mainly at the expense of Corn. Following the new year, grain traders will eagerly await the release of the USDA January crop production report on January 12, for the final data on the size of this past seasons harvest. With talk among analysts that the USDA may lower its final totals for both Corn and Soybeans, traders may be covering short positions ahead of the end of the year when trading volume tends to wane as market participants take time off for the holidays.
Technical Notes? -? View Today’s Chart
Looking at the daily chart for March Corn, we notice what may be a head and shoulders bottom formation. This could signal that a major low is in place with prices now testing the ?neckline? of the formation. A close above the 200-day moving average (MA) would add confirmation to this technical pattern and put Corn bulls back in charge. The 14-day RSI has turned positive with a current reading of 65.06. Resistance is seen at the 200-day MA, currently near the 425.00 price level, with support found at 375.25.
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