Chinese buying of US corn this week coupled with Dalian corn futures hitting 5 year highs sustained prices for now. Both events seemed to hold back funds from establishing new sizable shorts in the market. Corn futures gapped open lower last Sunday night on bearish weather reports. It has been a very hot July in the Midwest, but needed rains have come in during pollination giving thoughts to a bumper crop, as a greenhouse effect is in place for much of the corn belt. Forecasts in the 1 to 5 and 6 to 10 day are confirming more of the same. Should forecasts flip to hot and dry we could push higher in my opinion. The trade in my view is concerned that flooding in China could reduce production there to a sizable 10-15 million metric tons. Also since the week of May 28th, China has sold 4 million metric tons per week out of its state reserves with the results being that is bought immediately signalling strong demand. In total over eight weeks, its sold about 32 million metric tons,with corn futures in China hitting 5 year highs. The recent weather for corn has gone from too dry, to warm and wet which is ideal for production. It is my belief that the market is going to need to see a change back to hot and dry in the immediate future for a sustainable rally for corn. One bearish factor is the excess with an ending stocks figure at 2.6/2.7 billion bushels. With more Brazilian corn being harvested as their secondary corn crop is at 50 percent harvested, you wonder if China fills future needs buying Brazilian corn just as they do with soybeans. Daily chart for December corn below. Support for December Corn at 333, a close under and its 321. Aclose under 321 and we trade down to the 20 percent down for the year threshold at 311. Resistance is at 344 and then at 351, the 10 percent threshold. A close over 351 could push the market to 358.
Trade Recs-
Futures-N/A
Options-N/A
Risk/Reward
Futures-N/A
Options-N/A
Please join me for a free grain and livestock webinar every Thursday at 3pm Central. We discuss supply, demand, weather, and the charts.Sign Up Now
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.