Price action: Corn futures traded mixed as traders evened up positions before tomorrow’s USDA reports. March futures edged up 1 1/4 cents to $6.01.
Fundamental analysis: Prices rose on shrink crop prospects in South America. Crop consultant Dr. Michael Cordonnier cut his Brazilian corn production forecast 1 MMT to 112 MMT, while Brazil’s USDA counterpart, Conab, revised its estimate down by 4.3 MMT, to 112.9 MMT. Forecasts for continued short-term hot, dry conditions also supported prices.
Traders otherwise appeared reluctant to take large positions ahead of the release of several USDA reports at 11 a.m. CT tomorrow. USDA is expected hike its final estimate for the 2021 U.S. corn crop by about 7 million bu., to 15.069 billion bu., based on a Reuters survey of analysts. Tomorrow’s reports also include Dec. 1 U.S. grain stocks and monthly Supply and Demand balance sheet updates. The corn stocks data has a history of surprising the industry, so a sharp futures reaction can’t be ruled out.
Technical analysis: The uptrend in place since late summer has given the bulls the general technical advantage, although weakness since Christmas has seemingly balanced the short-term outlook. Look for light, sideways trading until the USDA releases its reports. March corn has support near its 10- and 20-day moving averages around $6.00 1/2 and $5.99, respectively, with backing from the 40-day moving average around $5.91. A drop below that level would have bears targeting the December low at $5.62 1/2. Conversely, the market hasn’t been able to challenge last week’s high at $6.11 1/4, much less the Dec. 28 high at $6.17 3/4. A push above those levels would have traders targeting the contract’s June high at $6.33, then the May contract high at $6.40 1/2.
