Corn in Position to Follow Meal Lower with Burdensome Supply

January 31, 2017 3:28AM CST

The rally to the January 24 th peak emerged from support from soybeans and a general re-inflate attitude among world money managers.  Without help from soybeans, the market faces a burdensome supply and a weak seasonal tone for February.  March corn traded to a two-week low of 3556.  US exports announced the sale of 105,000 tonnes of corn to Columbia.  Brazil’s fertilizer deliveries rose 12.9% in 2016 to a record 34.1 million tonnes up from 30.2 million last year.  With fertilizer use up along with planted area, and ideal weather so far for the first corn crop, some of the optimistic 90 plus million tonne estimates could be right on target.  Weekly exports inspections for corn came in at 1,061,865 tonnes compared to estimates of 750,000 to 950,000 tonnes.  As of January 26 th , cumulative corn export inspections for the 2016-2017 marketing year have reached 37% of the USDA forecast vs. a 5 year average of 34.9%.  March corn is up 5 ¾ cents on the month.  The managed money traders were short 96,369 contracts to start the month of January, and now with one day left in the month they are long 21,000 and the market is barely up.  It is safe to say that the producers sold into this rally.  Dec corn resistance comes in at 3886 with 382 as key support.

Corn Daily Chart

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