Negative news is priced in for Corn, look for further bounce

January 3, 2017 9:49AM CST

The bulls might hold the edge short-term as flooding issues in Argentina keep sellers on the sidelines, and northeastern Brazil weather is also uncertain.  Fund buying and short-covering could also favor the bulls.  Brazil exported 1.005 million tonnes of corn in December from 961,433 tonnes in November, and 6.267 million tonnes last year.  Brazil exported 70.19 million liters of ethanol in December from 40.4 million in November, and 286.7 million liters last year.  A wet forecast for the Argentine corn area is being monitored, as there still is almost 30% of the corn crop left to be planted.  A private forecast late last week was 71.3% complete from 83% as normal.  The majority of that total is in Northern Argentina.  With the new year upon us, the trade will focus on index fund re-balancing, with some estimates for corn net buying as high as 60k-100k contracts.  Net weekly export sales for corn came in at 958,600 tonnes vs. trade estimates of 800k-1.2 million.  Going into a time period when index funds might buy 60,000-100,000 contracts, trend following fund traders are holding a net short position of 100,648 contracts, the highest since October 11th.  Support comes in at 3496 with resistance at 355 and 3572.

Corn Daily

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