Commentary
WASDE Report-US corn ending stocks for 2022/23 came in at 1.257 billion bushels versus an average trade expectation of 1.238 billion. This was up from 1.182 billion in the November report. US Corn exports were revised down by 75 million bushels, but this was in line with trade expectations given the very slow pace so far this season. In my opinion It is too early to revise to the South American crop forecasts, but the trade is focusing on the possibility of lower production from Argentina if there is not a significant improvement in the weather. Prices held up relatively well this week after a chart breakdown to start the month. March futures lost just 2.6 cents for the week. Futures remain in a six-week downtrend as the market searches for a short-term bottom in my view. Outside markets and macroeconomic factors may have outsized influence through the holidays — slumping crude oil, in particular, could become an increasing burden for the commodity sector. However, this week’s price resilience illustrates solid buying interest on price pullbacks and the longer-term outlook for tight supplies, with U.S. stockpiles heading for a decade-low in 2023, remains supportive in my opinion. It is my belief that the near-term path for Corn is likely to be choppy/lower unless export demand strengthens. Technical levels for March 23 corn come in as follows for next week. Support is at the 50 percent Fibonacci retracement at 6.34. A close under, and it the 100-week moving average at 6.26. A close under and it is trend line support at 6.21. A close under here and its 6.14 then 5.93. Resistance is 6.52. A close over and its 667. A close over 6.67 and its 6.76 then 6.84.
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Sean Lusk
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