Corn Tech Update
Grain Market Commentary
Wednesday, February 14, 2018
by Jacob Christy, Freedom Program Trader
Corn has stalled since reaching its first key resistance area. So far this week March corn futures have struggled to clear 370, while December futures have failed at the 200-day moving average and the thought of 400. Despite the inability to keep the rally going, the market has also not shown any corrective moves just yet, leaving trade on edge. Prices are stuck between growing U.S. demand, and farmer selling, with short term technical momentum hanging in the balance.
Looking at the old crop chart shows the trend is still higher since the market broke is major descending trend line and 50-day moving average following the January crop report. Prices are 21c off the post report low and testing last year’s harvest highs. To the upside the market will see heavy resistance from 370 up to the 200-day moving average at 374. Expect a lot more farmer selling in that range if we are to clear today’s high. In the backend of the curve Dec18 is already up against its own 200-day moving average, and pennies away from 400.
The corn market finds itself between a rock and a hard place as supply and demand battle it out. Surging bean prices and a failing wheat market also make corn’s direction less clear. Most likely the market is in the midst of forging out an interim high that will keep the market range bound into U.S. planting. With that said, taking out the recent highs and key resistance could fuel more short covering. If that’s the case it will be interesting to see how long Dec18 can sustain elevated prices as incentivizing corn acres this spring seems counterproductive with the current U.S. carryout.