Tug of War in Corn

June 19, 2017 1:35PM CDT

The corn market closed down roughly 2.5% today, mostly due to much needed rains in the eastern half of the corn belt. We are expecting moderate temperatures and decent rain fall in the 10-day forecast which is also adding some pressure. Crop conditions are lower than both last year’s and the 10 year average at 67% good to excellent. This week’s update good be a catalyst to move the market. If there’s no change in the condition, we should see December test $4.00 while an uptick in condition could add selling pressure, causing the market to test $3.90, both it’s 50 and 100-day moving average. Ultimately, the downside is very limited this time of year and should be looked at as a buying opportunity. If we see a hot and dry July the market should go above $4 triggering some momentum to the $4.20-4.50 range. While we are seeing minor short term bearish fundamentals, I believe the longer term fundamentals point to higher corn. The plantings were delayed in most Midwest areas due to too much rain, while other areas in the south were extremely dry and hot. In the very wet areas the crop will more than likely have a shorter root system which won’t be able to withstand adverse weather. The bottom line is that both fundamentals and technicals are mixed right now, but in my opinion there is substantially more upside than downside at these current price levels.


Dec '17 Corn Daily Chart

Dec '17 Corn Daily Chart

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

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

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.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.