Price action: March corn futures rose 4 3/4 cents to $6.55 3/4, the highest close for a nearby contract since $6.83 on July 14. December corn rose 3 1/2 cents to $5.98 1/4 after posting a contract high.
Fundamental analysis: Corn futures rebounded late from earlier weakness behind reports Ukraine president Volodymyr Zelensky said he expects Russia will invade his country Wednesday, potential disrupting global grain trade. But Bloomberg reports the comments appeared to be sarcastic about other world leaders predicting a specific date for a Russian attack.
USDA reported 1.455 MMT (57.3 million bu.) of corn inspected for export during the week ended Feb. 10, up from 1.065 MMT the previous week and above expectations ranging from 950,000 to 1.4 MMT. Inspections are still running 12.5% behind year-ago, compared to 13.9% behind last week. USDA projects exports in 2021-22 at 2.425 billion bu., 11.9% below the previous marketing year.
Crop production in Brazil and Argentina has been greatly hurt by drought and little relief is expected for some of the driest areas. Paraguay and Brazil’s Parana, Santa Catarina and Rio Grande do Sul states “will see a restricted rainfall pattern through Saturday and fieldwork should advance well while immature crops in the drier areas see rising levels of crop stress,” World Weather Inc. said today. “Most of the remainder of Brazil will see regular rain during the next 10 days that will be supportive of crop development while slowing fieldwork.”
Large speculators scaled back their bullish bets in the corn market earlier this month but still retain a large net long position. The managed money net long in corn futures and options fell 35,219 contracts to 337,332 contracts for the week ended Feb. 8, according to the Commodity Futures Trading Commission’s Commitments of Traders report.
Technical analysis: Bulls retain an upper hand in corn futures, with the market still in a strong uptrend over the past five months. Bulls will target the contract high at $6.62 3/4 reached Feb. 10. Initial support comes in around Friday’s low at $6.37 3/4 and the 10-day moving average at $6.35 1/2. But the market is approaching overbought levels and funds hold a sizable net long, which could lead to long liquidation is futures fail to generate further upside this week.
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