Price action: March corn futures fell 1 3/4 cents to $6.25 1/4 but are still up from $6.16 1/4 at the end of last week. December corn fell 6 cents to $5.66 3/4.
Fundamental analysis: Corn futures fell under corrective selling following yesterday’s close near a nine-month high, along with pressure from the U.S. dollar’s rally to 19-month highs, which also helped send wheat futures down sharply. Strengthening exports and shrinking crop prospects in South American kept prices underpinned. UDSA reported net 2021-22 U.S. corn sales of 1.402 MMT for the week ended Jan. 20, up 29% from the previous week and up 84% from the average for the previous four weeks. Sales topped trade expectations ranging 600,000 MT to 1.2 MMT. Weekly exports totaling 1.437 MMT, a marketing-year high, were up 36% from the prior four-week average.
Crop stress in South America remains concerning even with rains providing some relief this week. Parts of Paraguay and Brazil’s Rio Grande do Sul state received another round of rain yesterday, “but coverage of significant rain was poor leaving many areas in need of greater rain,” World Weather Inc. said. Recent rain in Rio Grande do Sul “has not been enough to significantly improve soil moisture in the drier areas in the west and stress to crops and declines in yields will increase until rain returns Feb. 3,” World Weather said.
Technical analysis: Corn bulls retain a near-term technical advantage with prices in a 4 1/2-month uptrend. Initial resistance is seen at yesterday’s high of $6.27 3/4, matched today, and at the seven-month intraday high of $6.31 reached Tuesday. A push above those levels would have bulls targeting the June high at $6.33 and the contract high at $6.40 1/2. Initial support is seen at the 10-day moving average of $6.11 1/4 and this week’s low of $6.09 1/2. March corn moved slightly away from overbought readings, ending today at 65 on the Relative Strength Index. A reading of 70 or higher is typically considered overbought.
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