Commentary
Corn failed to turn positive despite strengthening crude oil futures, two daily export sales and notable export inspections for the week ended March 2nd. In my opinion the trade is pricing in a positive outcome around the Black Sea grain agreement but is likely taking a risk-off position ahead of the deal’s expiration (March 19th) along with USDA’s supply and demand report due out March 8. USDA announced daily export sales of 110,000 MT to Japan and 182,400 MT to “unknown destinations” which is spelled CHINA, for delivery in the 2022-23 marketing year. The sales were the first flash sales announcements since Feb. 17. USDA also released weekly export inspections, which showed inspections of 899,810 MT (35.4 million bu.), which was 250,507 MT above the previous week and well above the expected pre-report range of 450,000 and 750,000 MT. Marketing year to date inspections for export shipment total 602 million bushels, which falls short of the seasonal pace needed to hit USDA’s target by 190 million bushels, with the deficit continuing to grow. However, we are now seeing a move toward strengthening the export pace as available supplies from Argentina, Brazil, and Ukraine tighten. That still may not allow US corn to close the gap to hit USDA’s target, but it may allow it to narrow it in the weeks and months ahead, especially with drought continuing to shrink the Argentine crop. The wild card in my view here is the grain deal out of Ukraine. Should the Russians not extend it, lookout for a potential limit up move. Should they extend it as expected, look to buy the dip after the algos sell the news in my opinion. Technical levels for the remainder of the week come in as follows. Last week’s low is first support down at 6.23. A close under and its 6.08/6.11. A close under 6.08 and its katy bar the door to 5.77. Resistance is at 6.42 and then 6.45. A close over 6.45 is needed to turn positive and if that happens, the next level of resistance is at 6.58. A close over 6.58 this week and the market could revisit the 6.78/6.84 area in my opinion.
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