You are here

Demand For U.S. Corn Offers Price Support

Fresh USDA data expected next week.

In an almost direct copy of yesterday, corn saw the beans/wheat lower which spilled over resistance until corn setback about 2 cents before finding active support again. Also adding support was finding 365K tonnes of corn in an 8 AM sales announcement, keeping the streak of recent strong exports going in this market.

Yesterday's export report put the total corn exports back on pace with USDA expectations, another strong report could actually put corn ahead of pace for the first time this marketing year. While the chart still suggests this market is bound to find a 5 - 7 cent correction at some point exports are strong enough to keep putting in good support on just 2 cent pullbacks.

Early next week, corn traders should keep focus again on both South American weather maps for bean spill over influence as well as HRW area forecasts for wheat influence. Trade might remain calm for the first part of next week ahead of Thursday's February Supply/Demand report. We should see estimates for that report on Monday with trade likely not fearing as much of a drastic change as was possible on the January report. Let's look for a relatively slow start to the week with early influence coming from analysts' estimates on USDA report as well as spill over influence from wheat/beans.

Bulls

-USDA reported, this morning, that 365,000 tonnes of corn was sold to Egypt and unknown, this continues the recent active streak of sales.
-Once again, over 2K contract buy orders were found on just a 2 cent setback today, underlying support continues
-Early thoughts are that next week's report could result in a slight carryout decline, official estimates likely out on Monday

Bears

--For a good size correction bears will be looking for a surprising bearish report on Thursday
--The last couple days have shown that bears will want to look for something more than spill over resistance as it hasn't been enough alone to cause a sizable pullback

-------------

Rich Nelson
Allendale Inc.
815-578-6161
This material has been prepared by a sales or trading employee or agent of Allendale Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Allendale’s Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.
 
DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.
 
The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Allendale Inc. believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

Read more about

Talk in Marketing

Most Recent Poll

What best describes your approach to farmland right now?