Commentary
The panic selling witnessed in the energy and equity sectors on Friday didn’t appear to affect Corn futures all that much. In fact on Friday end users most likely bought the dip as December and March corn futures finished the day almost 20 cents higher from the daily lows. Tomorrow is first notice for December corn which makes March 22 the most actively traded contract on the Board. Per CFTC data released today, managed money added 25K longs to increase their net long to 366K. The managed money record long is near 419K. Futures were under profit-taking pressure in my opinion following last week’s climb to the highest levels in nearly five months. Spillover from a selloff in wheat also weighed on corn prices in my view. USDA reported 766,063 MT of corn inspected for export during the week ended Nov. 25, down from 825,650 MT the previous week. Inspections were within trade expectations ranging from 575,000 to 1.2 MMT. So far during the 2021-22 marketing year, corn export inspections totaled 8.581 MMT, down 17% from the same period in 2020-21.
The tug of war in not just corn but other Ag commodities moving forward is new threats and potential lock downs from Covid variants versus inflation inspired buying across the Board. What would or could shake these funds to liquidate their sizable long in corn? Technically in my opinion, the market needs to hold 580 March futures or prices could get pressured down the 50 day moving average in the low 560’s. If that level fails to hold look for trend line support at 5.48 and potentially 5.35 to be tested. A close under 535 and it could be katy bar the door to 5.07, and then 4.84. Key resistance this week at 5.90 a close over and the next target is 6.03. A push above this level and then the next target is the 6.27/6.30 area. This area represents 30 percent higher on year.
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