Argentina Rains and jump in open interest point to more buying in Corn

January 17, 2017 10:19AM CST

The technical action is positive, and there seems to be plenty of buying fuel ahead as the jump in open interest suggests short-covering could emerge soon.  With the massive Brazil corn production estimates emerging, it will take major damage in Argentina or poor weather for the second corn crop in Brazil to see supply support.  A prominent South America firm (Safras) pegged Brazil crop production at 94.89 million tonnes, up 8.39 million tonnes from the current USDA estimate.  March corn traded inside Thursday’s range on Friday with the market closing out the week with a very small gain.  With the market still digesting the USDA report, the market had little conviction on Friday but seems to be following soybeans higher today.  Open interest went up 24,283 contracts on Thursday and up 20,672 contracts on Friday, and with the managed money traders still short 76,564 contracts, this suggests new shorts and new longs entered the marker after Thursday’s report.  The excessive snow and rains in the pacific northwest have slowed movement out of the PNW ports and will continue to cause logistical problems for several weeks. 

With the surge in open interest, it appears that the big managed money traders are still not yet covering short positions and the market looks poised to follow soybeans higher.  Close in support for March corn is at 357.5 and 364.75 and 372 as next upside targets.

 

Corn Daily

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.