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NEAR-TERM MARKET FUNDAMENTALS: Better than expected weather in the northern Midwest over the weekend and forecasts for more of the same this week are dominating traders’ attention to start the week. Several major growing areas that needed rain got relief over the past week including the Ohio River Valley, southern Indiana and Ohio and parts of the mid south. The western and NW Corn Belt also saw moderate rain totals with the north central Corn Belt seeing unwelcome heavier rains. Temperatures are not expected to be as extreme as previously feared in the northern Corn Belt to start the week. A cool air mass may push 90 degree temperatures out of the northern tier of the Midwest today and possibly tomorrow, but a surge of hot air is expected to bring 90 degree plus temperatures to virtually all of the Midwest by mid week and into Thursday. A final push of very hot air is expected on Thursday and this may bring the hottest temperatures of the year into the north central Midwest. Forecasts then call for a surge of cooler air into the central and western Midwest on Saturday that would push the hot air into the mid south, the Ohio River Valley and the East Coast. Heat is not the only major feature of this week’s forecasts. Unstable air and the clash of hot and cool fronts in the northern Corn Belt are expected to bring moderate to heavy rains in a wide band running from eastern Nebraska through all of Iowa, northern and central Illinois and all of Indiana and Ohio. The heaviest amounts in the center of this band could be 4 inches or more with the entire band expected to see at least 1 inch. The USDA will release its weekly Crop Progress reports this afternoon. The overall good-to-excellent rating stood at 73% on last week’s report. Some analysts are expecting the rating to be unchanged to slightly lower this week. Corn planting is set to start in Argentina by mid August. West central areas could use more moisture, but moisture levels are considered favorable in the east. China saw showers in the SE corn areas of the NE corn belt this weekend with scattered showers in the NE of this region. Temperatures remain warm to hot and more rain is needed. The Commitments of Traders report for the week ending July 13 showed very heavy buying by trend-following or managed funds. These traders were net buyers of 75,787 contracts to increase their net long position to 92,984 contracts. The biggest net long position held by these traders was near 313,000 contracts in February, 2007. Index funds were net sellers of 5,232 contracts.
TODAY’S GUIDANCE: Profit taking and commercial selling helped to take the market lower overnight as traders are concerned that the yield reductions that were feared last week will not materialize. More selling is possible with the start of the day session, and this could take the December contract back near the 100-day moving average which stands near 384 3/4 this morning. First support in the December contract is at 391 3/4, with next support at 385. First resistance is at 4.10 1/4 and then at 4.35.
Corn Market Commentary – 2010.07.19
by Terry Roggensack on July 19, 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: Better than expected weather in the northern Midwest over the weekend and forecasts for more of the same this week are dominating traders’ attention to start the week. Several major growing areas that needed rain got relief over the past week including the Ohio River Valley, southern Indiana and Ohio and parts of the mid south. The western and NW Corn Belt also saw moderate rain totals with the north central Corn Belt seeing unwelcome heavier rains. Temperatures are not expected to be as extreme as previously feared in the northern Corn Belt to start the week. A cool air mass may push 90 degree temperatures out of the northern tier of the Midwest today and possibly tomorrow, but a surge of hot air is expected to bring 90 degree plus temperatures to virtually all of the Midwest by mid week and into Thursday. A final push of very hot air is expected on Thursday and this may bring the hottest temperatures of the year into the north central Midwest. Forecasts then call for a surge of cooler air into the central and western Midwest on Saturday that would push the hot air into the mid south, the Ohio River Valley and the East Coast. Heat is not the only major feature of this week’s forecasts. Unstable air and the clash of hot and cool fronts in the northern Corn Belt are expected to bring moderate to heavy rains in a wide band running from eastern Nebraska through all of Iowa, northern and central Illinois and all of Indiana and Ohio. The heaviest amounts in the center of this band could be 4 inches or more with the entire band expected to see at least 1 inch. The USDA will release its weekly Crop Progress reports this afternoon. The overall good-to-excellent rating stood at 73% on last week’s report. Some analysts are expecting the rating to be unchanged to slightly lower this week. Corn planting is set to start in Argentina by mid August. West central areas could use more moisture, but moisture levels are considered favorable in the east. China saw showers in the SE corn areas of the NE corn belt this weekend with scattered showers in the NE of this region. Temperatures remain warm to hot and more rain is needed. The Commitments of Traders report for the week ending July 13 showed very heavy buying by trend-following or managed funds. These traders were net buyers of 75,787 contracts to increase their net long position to 92,984 contracts. The biggest net long position held by these traders was near 313,000 contracts in February, 2007. Index funds were net sellers of 5,232 contracts.
TODAY’S GUIDANCE: Profit taking and commercial selling helped to take the market lower overnight as traders are concerned that the yield reductions that were feared last week will not materialize. More selling is possible with the start of the day session, and this could take the December contract back near the 100-day moving average which stands near 384 3/4 this morning. First support in the December contract is at 391 3/4, with next support at 385. First resistance is at 4.10 1/4 and then at 4.35.
Tags: Corn, Grains
About Terry Roggensack