RJO FuturesCast

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Agricultural

Ukraine’s Corn Crop Decline Fueling Bullish Market

Posted 11/14/2017 11:36AM CT | Manon Lasserre

As the market turns its volume and attention to March, so far we are seeing it trading ½ cent lower this morning. Outside market forces are mixed as a weak US dollar clashes with weaker energy markets. To review, yesterday’s export inspections at 375,000 tonnes were down 18% below last week’s total and is now down 45% from last year and the managed money trader’s net short position went up from 2,861 contracts to 205,624 contracts as of November 7. As of November 10,just 74% of the crop has been harvested with producers still waiting for drier conditions to finish harvesting.

As shown below, March corn seems to have found support around 354 the last few days and with open interest increasing on the break, the speculative short position continues to build. Furthermore, with December corn option expiration on November 24 and 42,000 December 340 puts open, the market could gravitate towards the strike. Resistance is at 357 ½ followed thereafter by 359 ¾.

Mar ’18 Corn Daily Chart

Corn Mar '18 Daily Chart

Manon Lasserre