The volume in corn yesterday was impressive, especially considering it is a shortened holiday week, and the turn down in open interest from a very high level with speculators holding a record net short position could be a sign of the start of a short-covering rally. With last Friday’s rumors of corn/ethanol contracts on Friday and 9,843 contracts Monday, speculative fund short covering could be seen for a few more days. The recent shift in China’s policy to increase E10 in gasoline blends has been anticipated by the trade and at the start of the program, increased ethanol imports could be seen. The weekly harvest update showed that corn is 90% harvested compared to 83% last week and 96% last year.  The last time the market saw two consecutive days with a higher close was on Nov 1 and 2. On November 2, the market put in the monthly high so far at 365.25. With a record short from the managed money trader at 230,556 contracts as of November 14, Friday’s trade should prove as a preview to what could occur if trend followers want to get covered.  Support for March corn is at 352, with 361 and 364 as resistance.

 

Mar ’18 Corn Daily Chart