Chicago Board of Trade Market News
Outlook: March corn futures are down 4 ¾ cents (1.2 percent) this week as the U.S. government shutdown continues and widely-used fundamental data remains unavailable. In response, traders have switched to trading technical indicators as well as political news, the latter of which has been volatile. The two most prominent demand-side factors are U.S. exports and Brazilian weather, both of which remain supportive in the near-term.
The weekly Export Inspections report from USDA AMS showed 1.108 MMT were inspected for export last week, keeping the YTD total up 61 percent. Sorghum export inspections reached 65,000 MT while 343 MT of barley were exported. Reports are that international tenders for barley are keeping exporters aggressive in efforts to secure business.
U.S. cash corn prices are down 1 percent from last week at $136.65/MT ($3.47/bushel) as farmer selling increased slightly on futures’ recent rally and pressured basis. Cash prices are 7 percent higher than this time last year. Barge CIF NOLA values are slightly higher this week as logistical concerns increase with the frigid Midwest weather. Current cash market trends, along with futures spreads, indicate the U.S. corn market is likely to remain entrenched in a sideways direction.
March corn trended sideways with last Thursday’s rally meeting position liquidation and unenthusiastic technical selling. For now, $3.85 is major resistance for March futures and the uptrend line at $3.72 is major support. Without the CFTC report, it’s impossible to truly know what managed money and commercial traders are doing, but there is widespread speculation that funds hold a modest long position in corn. That has weighed on the market late this week, especially as long corn/short wheat spreads unwind. Going forward, there is little to suggest March futures will break from their $3.70-$3.85 trading range without a significant shift in market fundamentals (robust export data, reduction in Brazilian second-crop corn plantings, etc.).