Mix of Factors Influencing Corn Market

In the corn market, there is a mix of factors influencing trading activity. Attention is focused on developments in Argentina's harvest progress, the impact of dry weather on second crop development in Brazil, and planting activity in the United States. While potential delays due to severe storms are anticipated in the U.S., the expected rainfall is seen as beneficial for long-term soil moisture. Despite solid ethanol and export demand, the market is affected by a large available supply. Ethanol production data from the U.S. Energy Information Administration indicates a decline, contributing to concerns over stock levels.

In the U.S., the corn outlook for the 2023/24 season forecasts increased usage for ethanol and feed, leading to reduced ending stocks and a slight decrease in the season-average farm price. Globally, coarse grain production forecasts for 2023/24 have been revised downward, with declines expected in production, trade, and ending stocks for foreign markets. Argentine corn farmers are facing challenges with leafhopper insects damaging crops, exacerbated by warmer-than-usual winter conditions.

Meanwhile, Nigeria has approved the commercial release of genetically modified "Tela maize" varieties, following South Africa's lead, aiming to address agricultural challenges such as insect resistance and drought tolerance. The adoption of GMOs has sparked debates globally, with concerns over environmental and health impacts, as well as issues surrounding traditional farming methods and seed patents. Governments in developing nations are navigating these concerns while considering the potential benefits of GMO adoption in agriculture.

Early Wednesday, corn prices are slightly up. The EIA's petroleum report indicated a drop in ethanol production and stocks, contributing to market dynamics.

The Crop Progress report from Monday showed some larger acreage states ahead of normal planting pace, though states like Indiana, North Dakota, and Ohio lagged behind. Later this week, widespread precipitation is expected across major U.S. growing regions, prompting farmers to hasten planting before the rain.

Despite expectations of decreased corn acres in Texas and the U.S. overall, improved growing conditions suggest potential for above-average yields. However, lower demand and larger stocks have led to declining corn prices, affecting profitability for producers. Texas growers may benefit from early planting and harvesting, with potential for better marketing opportunities.

Factors such as poor yields in Brazil, China's corn demand, and geopolitical tensions could influence global corn markets. Producers are advised to capitalize on any pricing advantages in the current market environment, as speculative traders remain bearish, and the outlook for higher prices is uncertain.

Data for Technical Analysis (1H) CFD US Corn Futures - May 24 (ZCK4)

Resistance : 436.94, 437.16, 437.50

Support : 436.26, 436.04, 435.70                  

1H Outlook

Source: TradingView                                        

Buy/Long 1 If the support at the price range 435.76 - 436.26 is touched, but the support at 436.26 cannot be broken, the TP may be set around 437.20 and the SL around 435.51, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 436.94 - 437.44, TP may be set around 438.10 and SL around 436.01, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 436.94 - 437.44 is touched, but the resistance at 436.94 cannot be broken, the TP may be set around 436.26 and the SL around 437.69, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 435.76 - 436.26, TP may be set around 435.40 and SL around 437.19, or up to the risk appetite.       

Pivot Points Apr 25, 2024 02:36AM GMT