Can Corn Break Out of Its Range?
Today’s Spotlight Market
Corn futures pulled back in overnight trading, giving back some of the recent gains. Corn futures have rallied for 5 consecutive sessions prior to today, with prices rallying to the highest level in four weeks, driven by concerns about the South American crop. The concern over the South American crop has been enough to offset the weaker US Dollar.
Fundamentals
Last week?s USDA report showed Brazilian Corn production was expected to fall to 81 million metric tons.? Private forecasters are shaving another 5 million metric tons off this figure, which would bring the crop size down to 76 metric tons.? The latest lowered estimate is close to what Michael Cordonnier of Soybean and Corn Advisor called a worst-case scenario in late April, when he said Corn could fall to 75 million tons, instead of the projected 79 million tons. To say that the drought is severe is an understatement.? In the US, plantings are at 75%, which is well ahead of the 70% 5-year average.? It is interesting to note that Indiana, the fifth largest corn producing state, is only at 45% plantings progress, versus the 5-year average of 61%.?? Corn is also emerging ahead of pace.? According to estimates, 43% of the nation?s Corn crop has emerged, versus the 5-year average of 34%.? The strength of the Crude Oil market has provided very strong outside support for the grain market.? The US Dollar Index continues to rebound, which could test Corn traders? resolve.
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the new crop December Corn futures testing resistance around the 402.50 level.? If prices can break through this minor resistance level, Dec Corn could test heartier resistance near the 410 and 420 marks.? If Corn fails to break through resistance here, prices may be stuck in another sideways trading rut.? Dec Corn is trading above the major moving averages at the moment.
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