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NEAR-TERM MARKET FUNDAMENTALS: Traders indicate that the corn market is looking for reasons to rally and these came in the form of a rally in crude oil over the course of much of the overnight session along with a late break in the dollar. Wet weather is also considered supportive with rains expected to move into the Delta and SW Corn Belt today with rains falling more generally across the western Corn Belt by tomorrow. This may include heavier amounts in parts of Missouri and the mid south as well as Nebraska. The late maturation of the corn crop and unwelcome rains in recent days and weeks have slowed the pace of harvest. This in turn has diminished the flow of corn onto the market since the burst of heavy farmer selling seen last Tuesday according to some cash market observers. China left its low-tariff import quota for corn unchanged at 7.2 million tonnes for 2010. This is to comply with commitments made with the World Trade Organization, but actual corn imports are forecast at 0.05 million tonnes by the USDA for 2009/10.
TODAY’S GUIDANCE: Traders may be expecting a typical Tuesday setback after yesterday’s sharply higher start to the week. That may not happen given the continued lateness of the corn harvest and the apparent urgency that funds are exhibiting as buyers. The December contract seems to be running past the 100-day moving average which is the best indicator that buyers do not view the corn market as overpriced, and vulnerable shorts are still looking for a spot to cover. We would keep our goal at 396 1/2 in the December contract. First support is at 370 in the December contract and then at 363 1/2 and 347 3/4. First resistance is in a zone from 387 1/2 to near 396 1/2 and it looks like we can make it to the high end of that zone over the short term.
TODAY’S MARKET IDEAS: Avoid getting pulled into a bear trap by “Tuesday” sellers today. Look for the market to continue to run barring a sharp run up in the dollar today.
