Corn Market Defensive and Choppy Ahead of Crop Reports

May 7, 2018 9:46AM CDT

July corn closed 7 cents higher on the week, closing at 406^2 after trading back off the 408^2 high on Friday. The market has traded lower to start the week, pulled down by a strengthening US dollar and forecasted rains later in the week for Brazil causing some selling pressure overnight in the soybeans market. Thursday brings us both the Crop Production and USDA Supply and Demand reports, with a potentially bullish consensus, barring any major surprises.  The expectation is a tightening in old crop ending stocks, as well as a below average world ending stocks number. Also, this week planting progress is expected to come in at 35%, down from the 5-year average of 44%, also giving the market some support. In the July contract, support comes in at 399^0 with resistance at last weeks highs of 408^2. The December contract sees support at 411^6, with resistance at 422^4. Momentum studies rising to overbought levels don’t bode well for the bulls, even with the shor- term trend being positive. Look for the market to be on the defensive, with choppy to lower trade down to support levels before Thursdays report. I would be looking to buy any dips as the long-term trend in the market does remain higher. 

Corn Jul '18 Daily Chart

Corn Jul '18 Daily Chart

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