Corn Positive for 7th Session in a Row, Hits Six-Week High
Dec 27, 2011
The grain complex finished sharply higher, fueled once again by the persistent heat in Brazil and Argentina and bleak precipitation outlook there for the coming week. At the closing bell Corn finished up 14 cents, Wheat up 21 3/4 cents and Soybeans up 34 cents.
Today’s strong push higher helped turn some technical indicators more bullish in the short term, but market participants should remain cautious since these levels were achieved on weak holiday volume. Corn, Soybeans and Wheat were all able to break through their 50 day moving average resistance, which triggered more intense short covering during today’s session. Corn should start to see some resistance around $6.40 as we approach the bottom side of the range we traded in much of October and November.
The dollar has not played a significant role in determining grain prices for three days now, but it will most likely become a bigger factor later this week. The dollar index should continue to trade sideways with support at 80 until we see fresh news out of Europe. Our eyes will be focusing the Italian Bond sale scheduled for Thursday as it will be the first real test of demand since the dramatic ECB liquidity operation. Be sure to check our blog on Thursday to see the results.
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PLEASE READ OUR RISK DISCLOSURE.