Oversold technically, but reversal in corn keeps sellers active | RJO FuturesPosted 03/21/2017 12:22PM CT |
Yesterday’s reversal leaves the chart pattern bearish and the corn market is bracing for a massive jump in South America production and the likely impact on US exports. May corn traded to a 7 session high yesterday, only to reverse lower and close well below Friday’s low. Exporters announced the sale of 132,000 tonnes of US corn sold to South Korea. A weak crude market along with a stronger Brazilian Real provided some negative forces along with favorable weather for the entire corn belt, with beneficial rains boosting soil moisture and warmer temps leading into planting season. The market is finding it difficult to sustain rallies as the Brazilian corn production continues to be reported at record levels. Friday’s Safras estimate was 98 million tonnes compared to the USDA’s recent 91.5 million tonnes. The managed money category sold a massive 103,683 contracts as of March 14 to flip their net position to short 23,602 contracts. The corn open interest has increased 38,818 contracts over the last four trading days, which could indicate they are adding to short positions. Position traders might be patient and wait for a setback to key support in December corn at 381. May resistance is at 365 with 355 as short term target.