Commentary
The bulls finally had their day in corn on Monday with a reversal on Monday’s trade. (See chart) Spill over strength from soybeans and meal where dips continue to be bought are aiding corn’s cause in my opinion. Open interest increased by 6600 contracts while funds covered 9K shorts. Today’s trade saw corn break 5 cents overnight but finished the day 1 cent higher. Yesterday was a reversal in my view and with harvest almost 90 percent complete, the market is increasingly eyeing the continued hot and dry forecast in Brazil. Needed showers are seen next week but up until now, rain forecasts haven’t verified and therefore bean planting gets delayed with many crops in need of replanting amid 100-to-105-degree heat. Brazil’s corn basis continues to rise (5 to 10 cents/bushel today) and give US offers a larger advantage to the Asian markets. Almost all the flash sales of the last 10 days have been to Mexico which is a market unaffected by Brazil’s competition. Private exporters reported sales of 101,745 metric tons of corn for delivery to Mexico during the 2023/2024 marketing year. Support is now at 460 in Dec corn, just below the prior day low. A close under and its 448 to 443. Resistance is here at 4.79 this week and with a close over the key area is 4.94. That was the closing price on Friday Oct 20th, a day where we made a new high at 5.09 then closed 15 cents lower on a key reversal day. We may have seen a key reversal higher yesterday with a bullish engulfing candle. Watch the roll to March futures next week as option expiration for December futures is the day after Thanksgiving. March 24 futures settled at 4.94 today. No trade recs as of this post.
Trade Ideas
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Risk/Reward
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