Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
NEAR-TERM MARKET FUNDAMENTALS: The corn market remains in a volatile 2-sided trading pattern with overnight action pushing the market lower on concern over the possible non-servicing of debt held by Dubai. However, the March corn contract remained within Wednesday’s broad trading range during the overnight session and this stands in contrast to other commodity and equity markets that saw a much more significant turn to the downside overnight. Moderate rains in the north central Midwest over the past week caused relatively minor harvest delays in corn. Drier weather is already underway in the region and this is expected to last into early Sunday when a light and scattered rain system may start to spread over the region. This light rain is expected to end by Monday with at least a short period of dryness to follow. Traders expect another week of good harvest progress in corn to be reported on the next Crop Progress report which is due out on Monday afternoon. The USDA will issue its latest Export Sales report this morning and traders are expecting another corn sales number that is well below the average of 827,800 tonnes needed each week to reach the USDA’s export projection for the 2009/10 crop marketing year. Traders have focused attention back on the issue of the ethanol blend rate this week. The EPA is scheduled to announce by December 1st whether it will increase the ethanol blend rate beyond the current level of about 10%. The EPA had said in early November that this announcement could be delayed beyond December 1st until the agency looks at further data regarding the effect of a higher ethanol blend rate on all types of engines. It is thought that older engines, possibly those built before 2000, could see some corrosive damage from more ethanol, but this is not known. The CFT will delay release of its latest Commitments of Traders report until Monday afternoon due to the Thanksgiving holiday.
TODAY’S GUIDANCE: The corn market looks like it is trying to establish a zone of value under the mid-November highs. The big turnaround to the downside on Monday and the follow through break on Tuesday came on light pre-holiday volume, and much of this was erased by a light volume rally on Wednesday. Corn then held up fairly well overnight in the face of some pretty grim price action in energy and equity markets, but further pressure is possible into early next week. This could come on farmer selling and uncertain, 2-sided action on the part of funds. First support remains near 390 in the March contract with next support running from 380 to 385. First resistance is again near 405 to 407 although the March contract pushed just past that level on Wednesday.
