Can Corn Futures Continue to Rally?
Thursday marked the last trading day of the month and first quarter, which coincides with one of the more highly anticipated USDA reports of the year; quarterly stocks and prospective plantings.
The USDA estimates that there will be 90.036 million acres of corn planted in the U.S. this year, that was well below the average analyst estimate of 91.776 million and down sharply from last year’s 94.641 million. Quarterly stocks were reported at 8.347 billion bushels, this was slightly below the average estimate of 8.427 billion, but still well above last year’s 7.396.
With the two headline numbers for corn coming in below expectations, the market responded with a sharply higher trade with the July contract settling 15 ¼ cents higher. As you can see from the chart, corn futures spent much of March attempting to carve out a low and the recent USDA report may aid in that effort. The Bulls still have their work cut out for them though, they will want to see consecutive above our first resistance pocket from 456 ¾-460 ¾. If they can achieve that, we could see additional momentum push prices up near our next resistance pocket from 471-475, which happens to currently coincide with the 100-day moving average.
That momentum could come from new buyers, but also short covering from Funds who are still holding a hefty net short position, to the tune of 245,463 futures and options contracts. From a seasonal standpoint, there’s the potential for uncertainty around weather and its impact on production that could also help prices firm.
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC 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. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
The USDA estimates that there will be 90.036 million acres of corn planted in the U.S. this year, that was well below the average analyst estimate of 91.776 million and down sharply from last year’s 94.641 million. Quarterly stocks were reported at 8.347 billion bushels, this was slightly below the average estimate of 8.427 billion, but still well above last year’s 7.396.
With the two headline numbers for corn coming in below expectations, the market responded with a sharply higher trade with the July contract settling 15 ¼ cents higher. As you can see from the chart, corn futures spent much of March attempting to carve out a low and the recent USDA report may aid in that effort. The Bulls still have their work cut out for them though, they will want to see consecutive above our first resistance pocket from 456 ¾-460 ¾. If they can achieve that, we could see additional momentum push prices up near our next resistance pocket from 471-475, which happens to currently coincide with the 100-day moving average.
That momentum could come from new buyers, but also short covering from Funds who are still holding a hefty net short position, to the tune of 245,463 futures and options contracts. From a seasonal standpoint, there’s the potential for uncertainty around weather and its impact on production that could also help prices firm.
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC 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. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.