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Corn Market Strong Ahead of Christmas

December 23, 2011

This information is provided by Archer Financial Services, Inc., 800-933-3996.

 

The grain markets put in a strong weekly performance with values climbing 3-7%.  The corn market had its 8th strongest weekly performance of the year as corn prices surged nearly 40 cents above last week’s close. 
 
Soybeans also gained nearly 40 cents while wheat prices reached beyond the 40 cent higher area at one point, for the week.  Price performance began to improve two weeks ago in the corn market as March corn tested and briefly violated the $5.80 level and rallied to several strong closes. 
 
This week the market broke out of it sideways to lower pattern and is now poised to test its 50-day moving average near $6.28.  Look for this level to be challenged early next week.  The markets began their turnaround on firming technicals, but gained momentum on growing concerns of Southern Hemisphere weather. 
 
One of the market’s jobs is to add and extract weather premium as conditions warrant.  Although we have not quite entered a timeframe where large scale production declines are being seen, the current weather pattern, especially in Southeast Brazil and Argentina justify adding value to prices.  How quickly and to what degree weather premium is added to the market is most anyone’s guess. 
 
However, if the current weather pattern persists in that part of the world, acute rallies on lower holiday volume cannot be ruled out.  At the very least, sellers will be limited based on the current weather conditions. 
 
These markets are poised for a solid start to 2012, as growing weather concerns and an expectation of a supportive January production report should keep values inching or leaping higher in the near term. 
 
Those that missed out on the solid selling opportunities presented last summer may get another "bite at the apple" early next year.

 


 

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