Commentary
Funds ended November with the most bearish corn position ever for November net short approximately 206K futures and options contracts. It’s the largest net short since the pandemic (June 2020), and it surpasses the previous largest November short of 2017. This week saw export inspections data released Monday that in my view disappointed traders and sent nearby futures to fresh lows through midweek. However, the price action was reversed on first notice day for the December contract (11/30) which in my opinion was not a coincidence. The bearish trend was reversed in my view when USDA’s Export Sales Report stated the total for the week ended Thanksgiving at 1.928 million metric tons (MMT). That smashed expectations and represented a marketing-year high, with futures rebounding strongly. The focus on exports and South American crop developments seems likely to be the cues funds may rely on during the winter quarter. It is my belief that there is a large emphasis on the price action of corn futures in December because corn generally leads the grain sector through winter. In 18 of the past 20 years, January soybeans have matched corn’s December direction. Wheat has matched corn’s direction 17 times over the same period. If corn makes a sizable move in December, soybeans and wheat potentially could follow suit. Technical levels for March 24 corn come in as follows for next week. Support is down at 4.74/73. A close below and I wouldn’t be long as next support is down at 4.59. A close under 4.59 and its 4.52 to 4.47. Resistance is at 4.89. A close over and its 4.97. A close over that level and its 5.06/07. Overt this level and the market could run to 5.19.
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Sean Lusk
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