Will today's corn rally hold?
May 22, 2013
Corn technicians are closely watching the $5.11 support area, which held in place after early threats yesterday. I suspect the trade will take a couple of runs at the barrier before ultimately deciding on its true direction. From my perspective, with old-crop tightness, we may actually get stuck in a range between $4.90 and $5.50 until the end of June USDA Stocks Report. As for old-crop, I suspect prices will have a hard time sustaining any momentum over $6.60. From a producers perspective, if your still holding old-crop bushels, and the basis remains strong in your area, you have to look to sell more bushels on rallies beyond this level. Regardless of how tight cash supplies are, if spec's continue to unwind bull-spreads on the board it will be tough for old-crop flat prices to gain much upside traction. As we have learned the last several years, swimming upstream against "money-flow" is never any easy feat.
Even though we made huge leaps in planting progress this past week, recent rainfall events may keep many planters sidelined for the next several days. With preventive plant dates quickly approaching many producers may be forced to make a tough decision about those final few acres.
Example: Kevin, a little update on things in north-central North Dakota. It has been raining for two days straight now, many areas have received up to 5 inches of rain. It looks as if it will be a week or more till we can get back in the fields, and thats with good sun and strong winds. Friday is the end plant date for canola and corn. Seems as if we will be planting well into June or else electing to go with "prevent plant." Just wanted to keep everyone updated.
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