Corn: Corn, on the contrary to soybeans, is actually riding along the bottom end of the trend line with a gap above between $3.42-$3.43^6. Although the story is similar with strong demand and good weather, corn has the wildcard of a large “net short” position held by funds. If/when we get a bullish catalyst, the short covering rally can push this as far as $3.50+ in my opinion. Keep an eye on the weather forecast and sales to China this week to lead the market. Crop progress today should give some directions as well. The MACD study below is still in a sell, but starting to curl back up towards neutral, and a cross of the two line would indicate a new buy.
Soybeans: Soybeans are beginning the morning by testing the upper range of the trend yet again. Will this be the time it finally breaks out? Depending on weather and demand this week, this may very well be the time to do it. The problem for that thought is, weather is remaining bearish in the face of good demand. I expect this resistance to hold until there is more bullishness added from weather, or an obscene amount of demand out of China happens. Steady demand is good, but it may take more to get that breakout over $9.20 this week in the Nov. beans. Lastly, RSI is around 67 on a short-term view, so this may be another factor that limits rallies because of overbought conditions.
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– World Corn Outlook – Stock Change vs. Usage Ratio
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