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NEAR-TERM MARKET FUNDAMENTALS: The corn market continued to extend its recent gains during the overnight session with the May contract pushing to its highest level since January 14th. This came despite a strong move higher in the dollar and the lingering effects of last week’s negative US economic data in the areas of jobs and housing. Traders indicate that relatively light farmer selling after the January-February break and fair feed demand is helping to generate a short covering rally in futures. One analyst also indicated that the move to the net short side by trend-following funds in January and early February is mow seeing a minor reversal. The Commitments of Traders report for the week ending February 23rd showed strong buying by Non-Commercial no CIT traders, also known as trend-following funds. They were net buyers of 20,348 contracts to switch their net position to net long 18,105. Index funds were net buyers of just 206 contracts, but their long position is still near its all-time high at over 447,000 contracts. The corn market saw a pause in its advance during the middle of last week, with some traders crediting that to poor economic numbers in the US. However, last week was bracketed by a very strong rally on Monday and an advance to a new high for the week on Friday. Weather in Argentina was dry again over the weekend as expected. Forecasts call for mostly dry conditions into the first half of this week with temperatures at normal to somewhat above normal levels. This is considered favorable for the corn crop as it advances through the filling stage and the crop nears harvest in some areas. Weather in the US is expected to clear somewhat this week allowing for unrestricted corn movement in most areas. Traders continue to see expectations for a wet spring and slow planting progress to benefit corn at the expense of soybeans. Cash markets are developing a two-tiered pricing structure as corn processors and ethanol plants bid up for higher quality corn and lower quality corn is pressured due to an excess supply of lower quality corn. Traders are nervous that as the weather warms up in the weeks just ahead that more corn will spoil.
TODAY’S GUIDANCE: Look for the steady advance to continue in a corn market where managed funds may be looking to boost their very small net long position. The fact that the market held up so well amid poor economic data last week may indicate that corn is either moderately oversold, or perhaps benefiting from a resurgence of mild inflationary concerns. The 100-day moving average is near 400 in the May contract this morning and that appears to be where we are headed. First support remains near 383 and 379 with resistance is at 395 to 403.
Corn Market Commentary – 2010.03.01
by Terry Roggensack on March 1, 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: The corn market continued to extend its recent gains during the overnight session with the May contract pushing to its highest level since January 14th. This came despite a strong move higher in the dollar and the lingering effects of last week’s negative US economic data in the areas of jobs and housing. Traders indicate that relatively light farmer selling after the January-February break and fair feed demand is helping to generate a short covering rally in futures. One analyst also indicated that the move to the net short side by trend-following funds in January and early February is mow seeing a minor reversal. The Commitments of Traders report for the week ending February 23rd showed strong buying by Non-Commercial no CIT traders, also known as trend-following funds. They were net buyers of 20,348 contracts to switch their net position to net long 18,105. Index funds were net buyers of just 206 contracts, but their long position is still near its all-time high at over 447,000 contracts. The corn market saw a pause in its advance during the middle of last week, with some traders crediting that to poor economic numbers in the US. However, last week was bracketed by a very strong rally on Monday and an advance to a new high for the week on Friday. Weather in Argentina was dry again over the weekend as expected. Forecasts call for mostly dry conditions into the first half of this week with temperatures at normal to somewhat above normal levels. This is considered favorable for the corn crop as it advances through the filling stage and the crop nears harvest in some areas. Weather in the US is expected to clear somewhat this week allowing for unrestricted corn movement in most areas. Traders continue to see expectations for a wet spring and slow planting progress to benefit corn at the expense of soybeans. Cash markets are developing a two-tiered pricing structure as corn processors and ethanol plants bid up for higher quality corn and lower quality corn is pressured due to an excess supply of lower quality corn. Traders are nervous that as the weather warms up in the weeks just ahead that more corn will spoil.
TODAY’S GUIDANCE: Look for the steady advance to continue in a corn market where managed funds may be looking to boost their very small net long position. The fact that the market held up so well amid poor economic data last week may indicate that corn is either moderately oversold, or perhaps benefiting from a resurgence of mild inflationary concerns. The 100-day moving average is near 400 in the May contract this morning and that appears to be where we are headed. First support remains near 383 and 379 with resistance is at 395 to 403.
Tags: Corn, Grains
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