Corn Trade Sees Good Weather in South America and Concerns with Mexico

January 30, 2017 7:34AM CST

The market seems to be in a position to push lower over the near-term unless a more serious weather threat develops in South America.   Fears of seeing a drop in Mexican corn imports from the US has helped to drive the market to an eight-session low.  The corn market was under pressure for much of the session on Friday with continues concerns about the trade war rhetoric from the new administration and Mexico.  The sweeping reversal lower on January 24 th was accompanied with a stochastic sell signal from an overbought condition.  This opens the door for a more extensive pullback than previously thought.  The more negative pattern comes at a time of seasonal weakness as well.  The commitment of trader’s reports as of Jan 24 th showed non-commercial traders held a net-long position of 134,386 contracts.  Commodity index traders held a net long position of 352,686 contracts, down 699.  Managed money traders bought 72,283 contracts for the week, taking their net position from short 51,385 to long 20,898 contracts.  Demand news has been strong for a few weeks, but the technical action turned sour last week.  Resistance today is at 3632 and support is 3562.

Corn Daily Chart

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