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NEAR-TERM MARKET FUNDAMENTALS: A modest bounce overnight in corn may have been tied to relief that the State of the Union address did not contain any further bad news for the markets. This should allow the corn market to concentrate on economic news, export sales and the pace of farmer selling. In recent days and weeks, the economic news has been on the negative side for the US in terms of the outlook for consumer demand. This has dovetailed with uncertainty over the effects of tightening measures currently underway in China. However, export
sales have been strong in corn, and farmer selling has been disciplined, which has kept basis levels mostly steady in recent days after the significant basis gains seen in key areas during the first 2-3 weeks of January. Traders are expecting another good export sales number this morning with estimates ranging up to just over 1 million tonnes. Last week’s total was in excess of 1.6 million tonnes. This compares to a weekly average of 753,400 tonnes needed to reach the current USDA export projection for the 2009/10 crop marketing year. Forecasters in Argentina are calling for scattered rain on Saturday and again to start next week. They expect cooler and wetter weather to start next week which would bring relief from the 100 degree temperatures that have been seen in recent days. Hot weather is expected to continue into the start of next week. The EPA continues to work toward finalizing its standards for the development of renewable fuels that have been mandated for the nation’s fuel supply. Sticking points have involved the impact that the production of various feed stocks for bio-fuels will have on the environment. In addition, progress has been slower than expected toward the profitable use of non-food cellulosic sources for ethanol production. No news on when the new EPA standards will be put in place. An Israeli firm has bought 27,000 tonnes of corn. The origin is thought to be Argentina. Taiwan bought 60,000 tonnes of South American corn yesterday.
TODAY’S GUIDANCE: Price erosion is likely to continue over the intermediate to longer term, but another round of increases in open interest in corn this week may be setting the stage for a modest bounce. However, fund selling remains an ongoing negative factor, and we would still not be tempted to pick a bottom. First support remains at 354 in the March contract. Resistance remains at 372 1/2.
Corn Market Commentary – 2010.01.28
by Terry Roggensack on January 28, 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: A modest bounce overnight in corn may have been tied to relief that the State of the Union address did not contain any further bad news for the markets. This should allow the corn market to concentrate on economic news, export sales and the pace of farmer selling. In recent days and weeks, the economic news has been on the negative side for the US in terms of the outlook for consumer demand. This has dovetailed with uncertainty over the effects of tightening measures currently underway in China. However, export
sales have been strong in corn, and farmer selling has been disciplined, which has kept basis levels mostly steady in recent days after the significant basis gains seen in key areas during the first 2-3 weeks of January. Traders are expecting another good export sales number this morning with estimates ranging up to just over 1 million tonnes. Last week’s total was in excess of 1.6 million tonnes. This compares to a weekly average of 753,400 tonnes needed to reach the current USDA export projection for the 2009/10 crop marketing year. Forecasters in Argentina are calling for scattered rain on Saturday and again to start next week. They expect cooler and wetter weather to start next week which would bring relief from the 100 degree temperatures that have been seen in recent days. Hot weather is expected to continue into the start of next week. The EPA continues to work toward finalizing its standards for the development of renewable fuels that have been mandated for the nation’s fuel supply. Sticking points have involved the impact that the production of various feed stocks for bio-fuels will have on the environment. In addition, progress has been slower than expected toward the profitable use of non-food cellulosic sources for ethanol production. No news on when the new EPA standards will be put in place. An Israeli firm has bought 27,000 tonnes of corn. The origin is thought to be Argentina. Taiwan bought 60,000 tonnes of South American corn yesterday.
TODAY’S GUIDANCE: Price erosion is likely to continue over the intermediate to longer term, but another round of increases in open interest in corn this week may be setting the stage for a modest bounce. However, fund selling remains an ongoing negative factor, and we would still not be tempted to pick a bottom. First support remains at 354 in the March contract. Resistance remains at 372 1/2.
Tags: Corn, Grains
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