Price action: March corn futures fell 5 3/4 cents to $6.16 3/4, the contract’s lowest closing price since $6.16 1/4 on Jan. 21. New-crop December futures fell 4 3/4 cents to $5.68 1/4.
Fundamental analysis: Corn futures settled near a two-week low on profit-taking and technical selling in the wake of the early-week rally to nine-month highs. Expected drought-driven production shortfalls in South America remain supportive for corn prices, but crop losses have likely been factored in and the market likely requires sustained export business and an extended rally in soybeans to hold at elevated levels.
USDA reported net U.S. corn sales of 1.175 MMT for the week ended Jan. 27, down 16% from the previous week but up 47% from the average for the previous four weeks. Sales were within expectations ranging from 600,000 MT to 1.3 million MMT. No sales were reported for 2022-23. Exports of 1.177 MMT were down 19% from the previous week and down 1% from the prior four-week average. U.S. corn export commitments still lag last year’s pace by about 20%.
Also today, USDA reported daily corn sales cancellations of 380,000 MT to China for 2021-22.
Technical analysis: Bullish momentum faltered this week, with March corn heading for its first weekly decline in the past three, and an eroding technical posture makes the market susceptible to further long liquidation from speculative funds. The market may be in the process of establishing a near-term top. Initial support in March futures is seen at the 40- and 50-day moving averages at $6.04 1/2 and $6.00, respectively. Resistance comes in at the nine-month high posted Jan. 31 at $6.42 1/2. A close below $6.00 may have bears targeting the January low of $5.85 1/4.
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