Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
NEAR-TERM MARKET FUNDAMENTALS: Corn extended its recent lows overnight in line with a surge in the dollar. Traders indicate that buyers are on the sidelines in cash and futures markets and cash demand continues to languish due to the fact that export freight capacity is still being dominated by soybeans. The USDA will release its latest export sales numbers on Friday morning, one day late due to the holiday on Monday. Open interest fell yesterday in corn by 4803 contracts after surging to a new high for the year in the previous session. This week’s export inspections for corn were 30.3 million bushels, up from just over 24 million bushels last week. Total inspections to date stand at 29.2% of the USDA’s export projection for the 2009/10 marketing year compared to a 5-year average of 36.5%. Inspection totals should begin to increase into February. Inspections need to average 44.2 million bushels each week to reach the USDA’s projection. The USDA reported a sale of 116,000 tonnes of corn to an unknown destination yesterday. This follows a week of improved export demand, and some of this will appear on Friday’s Export Sales report. While the short-term fundamental and technical set-up appears quite negative, there is still talk that China may eventually be an importer of feedgrain; maybe even by later in this marketing year. China corn prices at some key locations are up 25% from last year and private trade houses believe that the lower crop and drought conditions in some areas are the reason for the rally. Corn starch plants are in full swing due to strong demand and livestock operations are also expanding rapidly. While the National Grain and Oils Information Centre have pegged the China corn production at 163 million tonnes, the USDA is at 155 million tonnes and the USDA attache is below this level. Some private forecasters in China have the crop as low as 140 million tonnes as compared with China usage expected near 159 million tonnes.
TODAY’S GUIDANCE: A new low late in the day yesterday followed by a new low overnight added to the downside momentum from a technical standpoint which points to a test of the 335 area in the March corn contract over the short to intermediate term. Light support is near 360 and then at 350 in the March contract. Better support is in a range from 330 to 340. At this point, a break to 391 area for December corn is likely a buying opportunity.
TODAY’S MARKET IDEAS: The market is seeing increased downside momentum and with high open interest, the downside still looks considerable but the market should find support soon.
Corn Market Commentary – 2010.01.20
by Terry Roggensack on January 20, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
NEAR-TERM MARKET FUNDAMENTALS: Corn extended its recent lows overnight in line with a surge in the dollar. Traders indicate that buyers are on the sidelines in cash and futures markets and cash demand continues to languish due to the fact that export freight capacity is still being dominated by soybeans. The USDA will release its latest export sales numbers on Friday morning, one day late due to the holiday on Monday. Open interest fell yesterday in corn by 4803 contracts after surging to a new high for the year in the previous session. This week’s export inspections for corn were 30.3 million bushels, up from just over 24 million bushels last week. Total inspections to date stand at 29.2% of the USDA’s export projection for the 2009/10 marketing year compared to a 5-year average of 36.5%. Inspection totals should begin to increase into February. Inspections need to average 44.2 million bushels each week to reach the USDA’s projection. The USDA reported a sale of 116,000 tonnes of corn to an unknown destination yesterday. This follows a week of improved export demand, and some of this will appear on Friday’s Export Sales report. While the short-term fundamental and technical set-up appears quite negative, there is still talk that China may eventually be an importer of feedgrain; maybe even by later in this marketing year. China corn prices at some key locations are up 25% from last year and private trade houses believe that the lower crop and drought conditions in some areas are the reason for the rally. Corn starch plants are in full swing due to strong demand and livestock operations are also expanding rapidly. While the National Grain and Oils Information Centre have pegged the China corn production at 163 million tonnes, the USDA is at 155 million tonnes and the USDA attache is below this level. Some private forecasters in China have the crop as low as 140 million tonnes as compared with China usage expected near 159 million tonnes.
TODAY’S GUIDANCE: A new low late in the day yesterday followed by a new low overnight added to the downside momentum from a technical standpoint which points to a test of the 335 area in the March corn contract over the short to intermediate term. Light support is near 360 and then at 350 in the March contract. Better support is in a range from 330 to 340. At this point, a break to 391 area for December corn is likely a buying opportunity.
TODAY’S MARKET IDEAS: The market is seeing increased downside momentum and with high open interest, the downside still looks considerable but the market should find support soon.
Tags: Corn, Grains
About Terry Roggensack