Corn Tech Update

Fueled by a shocking Sep1 stocks numbers and growing world feed demand, corn has gained 25c over the last six sessions. Dec20 futures are now at pre-Covid lockdown levels, and up 70c from their August contract low. The world balance sheet is changing, and the market is trying to find fair value.

Looking at the chart shows corn remains in its upward trend. The market did a bit of consolidation after the stocks report day rally, but that pattern was broken with the surge yesterday. Price objectives now sit in the 397-404 range. How much the farmer engages at 400 could dictate the high side ability of the market short term.

Working against further gains is an overbought condition and a fund crowd that has added quite a bit of length recently. If prices are unable to add to yesterday’s gains look for the recent consolidation area around 380 to act as first support. Below there the stocks report day low in combination with the 200-day moving average at 360 marks the key turning point for the bull trend.

In the understatement of the week, we’re a far cry from the 3.3-billion-bushel carryout we saw in August. The market is now trying to find a new equilibrium as global demand rises just as production concerns mount. For now, momentum remains higher and a test of 400 looks likely just to see what’s up there. That said, Friday’s USDA data will set the tone. Stay tuned.