Corn Market Setback Unlikely, Analyst Says
Corn had a very calm trading session, both last night and throughout today. For once, there were no 8 a.m. exports for any of the grain markets, which meant no direct or spillover news for corn to trade from. Once again, the recent support around $3.50 per bushel held throughout the day. Without much other news to talk about to challenge that support, it was tough to expect much of a move lower.
This week seemed to suggest that a technical pullback was needed, but demand was strong enough to prevent that from occurring. As a sign of just how calm trade was in corn today, it is worth pointing out that the settlement from last Friday was $3.54¼ for December, and today's settlement was $3.52½. This is also a sign that, in general, funds were light traders this week. There were times where it appeared they may have lightly covered short positions, but there was no sign of any aggressive short covering from them.
Short term, there is still reason to expect a larger scale technical pullback at least into the low $3.40's. Long term, we should note that even if corn does pull back, the uptrend line crosses at $3.32½. So, it would take a major setback for corn to actually look negative again.
Aggressive bulls will look to buy in the low 350’s either looking for 8 a.m. sales or fund short covering to offer quick profits. A larger technical pullback can still be bought anywhere in the low 340’s, as the uptrend would still not be threatened on a pullback to that level. Demand continues strong this week with both ethanol and exports beating expectations for the week. There is little reason to expect this demand to slow anytime soon.
While the short-term pullback objective has been completed in the low 350’s, there is still larger pullback potential to the low 340's possible in this market.Bears need funds to remain on the sidelines while looking for demand to ease up for just one week to allow for a larger pullback to the second technical goal.
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