Corn Tech Update
Grain Market Commentary
Wednesday, February 26, 2020
by Jacob Christy, Senior Merchant, The Andersons
Coronavirus fears and front end spreading pushed corn futures to new contract lows today. Spread volumes surged as first notice day looms Friday, forcing speculators to move shorts from March to May. Even with spreads the dominant feature today, sentiment this week remains bearish as corn prices drop for a sixth consecutive session. A spark is need to shift momentum.
Sentiment is negative, but continuation support has held futures above 370 for now. The market is also deeply oversold as well which could make further declines more difficult while opening the door for a stronger technical correction if the chart can show life. Seasonally corn also tends to forge a low between 360-370 between now and march intentions.
With all that said there’s nothing bullish about a contract low close. The market hasn’t shown any signs of a reversal, and until those signals start popping up expect the path of least resistance remains lower.
Fear is gripping markets around the world. The unknown economic impacts of coronavirus has sent shockwaves of risk-off fear through the trade this week. Until the impacts of coronavirus are better understood, expect our markets to watch with anxiety as the equity market slide continues.