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NEAR-TERM MARKET FUNDAMENTALS: After closing higher for five days in a row, the December corn contract ended the day unchanged yesterday. This has pushed the December contract into the lower end of the trading range that was established in the December contract from late March through early June. Traders indicate that strong demand and short covering are the key factors in this rally with weather still a mostly negative influence in terms of price. The weather forecast for the Midwest has dried out a bit over the past 24 hours with calls for more widely scattered showers and thunderstorms occurring in different parts of the region from today through Saturday. Somewhat drier weather is considered welcome. This should be accompanied by a warming trend that culminates with above normal temperatures on Friday and Saturday. Warmer weather is also considered mostly favorable, although longer term forecasts call for a further stretch of above normal temperatures throughout the region with well above normal temperatures in the Delta and into the Deep South. The somewhat drier forecast may ease fears of disruption from high water on the mid-Mississippi, particularly in the area just above St. Louis, in coming days. In yesterday’s action, December corn traded mostly lower to start the day session. However, it did manage to tick through Monday’s high in the opening minutes of the day, and this was followed by a minor new high into early afternoon. Traders said that the market was under the influence of conflicting factors with a lower dollar, higher crude and higher equities on the plus side, while a slight unexpected improvement in the US crop condition last week weighed on the market. The USDA will release its latest weekly Export Sales report tomorrow. Traders are looking for another number that is well above the 286,800 tonnes needed each week to reach the USDA’s current export projection for 2009/10.
TODAY’S GUIDANCE: Plant populations per acre have continued to increase in recent years according to one analyst and these denser populations have not been tested by frequent or persistent bouts of high temperatures across the Corn Belt over the past two years. Some traders note that it is not clear whether this will have a detrimental effect on yields prior to pollination, but observe that high heat could have a greater than normal negative effect on yield if it occurs during pollination. A more mixed weather outlook and ongoing strong export demand are continuing to support the market with traders starting to price in a small weather premium in corn for the first time in months. Traders are also looking at the likelihood of a second straight year of corn demand being higher than production into 2010/11. First support in the December contract is near 365 to 368. Close-in resistance remains at 378 1/2 with next resistance near the 100-day moving average which is at 388 1/4 this morning.
Corn Market Commentary – 2010.06.16
by Terry Roggensack on June 16, 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: After closing higher for five days in a row, the December corn contract ended the day unchanged yesterday. This has pushed the December contract into the lower end of the trading range that was established in the December contract from late March through early June. Traders indicate that strong demand and short covering are the key factors in this rally with weather still a mostly negative influence in terms of price. The weather forecast for the Midwest has dried out a bit over the past 24 hours with calls for more widely scattered showers and thunderstorms occurring in different parts of the region from today through Saturday. Somewhat drier weather is considered welcome. This should be accompanied by a warming trend that culminates with above normal temperatures on Friday and Saturday. Warmer weather is also considered mostly favorable, although longer term forecasts call for a further stretch of above normal temperatures throughout the region with well above normal temperatures in the Delta and into the Deep South. The somewhat drier forecast may ease fears of disruption from high water on the mid-Mississippi, particularly in the area just above St. Louis, in coming days. In yesterday’s action, December corn traded mostly lower to start the day session. However, it did manage to tick through Monday’s high in the opening minutes of the day, and this was followed by a minor new high into early afternoon. Traders said that the market was under the influence of conflicting factors with a lower dollar, higher crude and higher equities on the plus side, while a slight unexpected improvement in the US crop condition last week weighed on the market. The USDA will release its latest weekly Export Sales report tomorrow. Traders are looking for another number that is well above the 286,800 tonnes needed each week to reach the USDA’s current export projection for 2009/10.
TODAY’S GUIDANCE: Plant populations per acre have continued to increase in recent years according to one analyst and these denser populations have not been tested by frequent or persistent bouts of high temperatures across the Corn Belt over the past two years. Some traders note that it is not clear whether this will have a detrimental effect on yields prior to pollination, but observe that high heat could have a greater than normal negative effect on yield if it occurs during pollination. A more mixed weather outlook and ongoing strong export demand are continuing to support the market with traders starting to price in a small weather premium in corn for the first time in months. Traders are also looking at the likelihood of a second straight year of corn demand being higher than production into 2010/11. First support in the December contract is near 365 to 368. Close-in resistance remains at 378 1/2 with next resistance near the 100-day moving average which is at 388 1/4 this morning.
Tags: Corn, Grains
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