The corn market has closed higher in three of the past four trading sessions, but it still looks vulnerable to increased selling pressure if speculators make a move to lighten up on their hefty net long position.
While drier weather in Brazil (especially the southern part) this week will help boost harvest activity, traders see the two-week outlook for very little rain in Argentina as somewhat supportive. There are some concerns about soil moisture in provinces such as Cordoba, Santa Fe and Buenos Aires, as there is no rain forecast for the coming weeks.
A Reuters poll shows an average trade estimate for this year's U.S. corn planted area of 92.9 million acres with estimates ranging from 91.5-94.7 million, versus 90.8 million last year.
The corn market managed to rally on Wednesday despite a sharp rally in the U.S. dollar and weakness in gold and the stock market. Further strength in the energy complex may have lent support.
Winter corn planting was 11% complete in Brazil as of February 11, down from a five-year average of 31%, according to AgRural. The technical setup in the corn market is still bearish, with a sweeping key reversal on February 9, a weekly key reversal for the week ending February 12, a stochastic crossover from near 82, and major RSI divergence that points to a loss of momentum.
The market is still overbought basis the COT report, and it could see increased selling if support levels Are violated. The large and small speculator combined net long position is 504,006 contracts, just short of the record 531,098.
Market Ideas
The corn market remains vulnerable to increased selling from speculators, if support levels are violated. Resistance for the May corn futures contract comes in at $5.53 1/4, with $5.13 and $5.05 1/2 as next support.
For daily updates on cattle, hogs, corn, wheat and the soy complex, visit https://www.hightowerreport.com.
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*** This report includes information from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made and we do not guarantee its accuracy or completeness. Opinions expressed are subject to change without notice. Any information or recommendation contained herein: (i) is not based on, or tailored to, the commodity interest or cash market positions or other circumstances or characterizations of particular investors or traders; (ii) is not customized or personalized for any such investor or trader; and (iii) does not take into consideration, among other things, risk tolerance, net worth, or available risk capital. Any use or reliance upon the information or recommendations is at the sole discretion and election of the subscriber. The risk of loss in trading futures contracts or commodity options can be substantial, and traders should carefully consider the inherent risks of such trading in light of their financial condition. Any reproduction or retransmission of this report without the express written consent of The Hightower Report is strictly prohibited.
February 18, 2021 at 11:04PM
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