Harvest delays, fund-buying support the corn market, analyst says
The highest close for December corn futures since August 27 is a positive technical development, and the market remains in a minor uptrend.
A slowdown in harvest due to heavy rains across the Midwest plus the emergence of fund-trader buying on the pullback are seen as supportive forces.
More talk that strong demand could cause a tightening in the ending stocks outlook for future supply/demand updates and the continued bullish action for December 2022 corn due to surging fertilizer prices have helped support the uptrend. The December 2022 corn futures contract has traded up to new contract highs, as the battle for acres for 2022 continues.
The market experienced an outside day higher close on Tuesday, which is a positive technical development. The buying pushed the market to its highest level since October 4. For the weekly ethanol production report today, the average trade expectation is 1.097 million barrels per day versus 1.096 million last week. Stocks are expected be around 20.341 million barrels, compared with 20.080 million barrels last week.
Talk that export demand should improve and that ethanol demand is on the rise lent support to the market on Tuesday. Strength in energy prices and a continued solid advance in the U.S. stock market were seen as positive forces.
The fertilizer index hit record highs which threatens higher food prices. The Archer Daniels Midland Chief Executive Officer stated on Tuesday that fertilizer continues to be available for farmers, but only at higher price. He added that it wasn't yet clear whether U.S. farmers will switch to soybeans from more fertilizer-intensive corn. He suggested that the numbers today are a little bit of a toss-up for the farmer.
Short-term support for December Corn moves up to $5.34 1/2, with $5.57 1/4 as next resistance. December 2022 corn support is at $5.33 and $5.27, with $5.50 1/4 and $5.61 1/2 as the next upside targets.
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