RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Agricultural

Tug of War in Corn

Posted 06/19/2017 1:35PM CT | Frank D. Cholly

The corn market closed down roughly 2.5% today, mostly due to much needed rains in the eastern half of the corn belt. We are expecting moderate temperatures and decent rain fall in the 10-day forecast which is also adding some pressure. Crop conditions are lower than both last year’s and the 10 year average at 67% good to excellent. This week’s update good be a catalyst to move the market. If there’s no change in the condition, we should see December test $4.00 while an uptick in condition could add selling pressure, causing the market to test $3.90, both it’s 50 and 100-day moving average. Ultimately, the downside is very limited this time of year and should be looked at as a buying opportunity. If we see a hot and dry July the market should go above $4 triggering some momentum to the $4.20-4.50 range. While we are seeing minor short term bearish fundamentals, I believe the longer term fundamentals point to higher corn. The plantings were delayed in most Midwest areas due to too much rain, while other areas in the south were extremely dry and hot. In the very wet areas the crop will more than likely have a shorter root system which won’t be able to withstand adverse weather. The bottom line is that both fundamentals and technicals are mixed right now, but in my opinion there is substantially more upside than downside at these current price levels.

 

Dec ’17 Corn Daily Chart

Dec '17 Corn Daily Chart

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Frank D. Cholly

Senior Market Strategist
<p>Frank has been involved in many aspects of the futures business, from taking and placing orders to providing high-quality order execution service. As a second-generation participant in markets at the Chicago Board of Trade, Frank spent his early years working in the Treasury bond pit servicing both institutional and retail clients. He then expanded his brokerage duties and began covering a wide range of markets, including stock index, metals, grains and the balance of the interest rate sector. Ultimately, he turned his full-time focus to the grain market, dealing primarily with proprietary and commercial business. Frank was a senior commodities broker at Lind-Waldock prior to joining RJO Futures in 2011.</p>
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