Corn is not as oversold as traders believe. Expect more choppy/downside trade ahead

October 24, 2016 10:03AM CDT

Thursday’s price action remains a bearish force, and the bears have more ammunition after the COT report on Friday showed that shorts covered more contracts than expected. December corn closed up 1.5 cents on the session Friday with an inside trading session, which left the market down 1.75 cents for the week. Some problematic rains could fall in the NW areas of the belt centered primarily over the Northern Iowa and Southern Minnesota over the next 7 days that could delay some harvesting. Harvest progress should be 60% or higher for today's weekly update. As of October 16th, Iowa was 33% harvested. The corn market found some spillover support from the soybean rally on Friday, and a strong ethanol market after Wednesday’s solid production numbers. The market is less oversold than expected basis the COT update, and South America crop is not showing any weather issues yet. The market is still under the negative influence of the October 20th sweeping reversal. Selling resistance for December corn is at 3552 and 3574 with support at 346 and 342. Traders might consider buying 2 March corn 340 puts for 8 cents or better.

 

Corn Daily

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