Corn Feast For Commodity Bears
Today’s Spotlight Market
U.S. Corn exports have been running slightly behind the USDA estimate so far this year, despite sharply lower prices than the market has seen in recent years. The wild card for U.S. Corn exports appears to be South America, where potentially higher Corn production this season is offset by disruptions to exports from labor strikes that have plagued both Argentina and Brazil so far this year.
Fundamentals
There is little ?cornfusion?? that commodity bears are in control of the Corn market, as the lead month July futures have fallen to their lowest levels in 6 months. A quick pace of Corn plantings so far this spring has been cited by analysts as a potential catalyst for the market sell-off. The USDA reported on Monday that 55% of the U.S. Corn crop has been planted, vs. 19% last week. To put these figures into perspective, only 28% of the Corn crop was planted at this time last year. Plantings in the two largest Corn producing states, Iowa and Illinois, were even further ahead of the national average at 68% and 69% completed respectively. An early planting can help improve overall yields, as the crop can mature prior to any potential frost or freeze threats in the fall. ?
Technical Notes? -? View Today’s Chart
Looking at the daily chart for July Corn futures, we notice that past support near the 375.00 price level failed to hold, which triggered additional selling pressure by momentum traders adding to short positions, as well as sell stops being triggered as weak longs exited the market.? The 14-day RSI has just fallen into oversold territory, with a current reading of 26.18. The latest downward price move does not encounter any chart resistance until a test of the October 2014 low of 346.75, with resistance seen at the previous support level of 375.00.
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