Corn may need some help from weather to bounce much more | RJO FuturesPosted 04/04/2017 9:22AM CT |
July corn has already recovered more than half of the February-March break and the upside potential above 3814 looks quite limited without help from late season Brazil weather or US planting issues ahead. After more rain this week, the 6-10 and 8-14 day US models are showing above normal precipitation. The market ran into producer selling on the rally yesterday as on farm stocks of 4.908 billion bushels, mostly centered in the western corn-belt, should provide resistance on rallies. Both old crop and new crop contracts scored bullish outside day higher closes on Friday and followed through with higher closes yesterday. The open interest in corn went up 23,833 contracts on Friday which likely is new longs after the release of the report on Friday. The latest models show heavy rains in the eastern two thirds of the corn-belt over the next two weeks, with the GFS model producing the heaviest amounts. The trend-following fund traders are carrying a short position of 155,512 contracts into the start of the growing season which could be a recipe for another whipsaw type trade. December corn needs a close over 394 to extend the rally. July corn resistance is at 3776 and 3814.