Mixed Corn Prices Amid Favorable Weather and High Stocks

Corn prices showed mixed performance, with nearby contracts increasing while deferred months decreased. Favorable weather conditions are expected to benefit crop development across most regions. However, the extent of crop damage will not be fully understood for several months. Export demand remains strong, and ethanol margins are favorable. The U.S. Energy Information Administration's weekly report showed a slight drop in ethanol production and a minor increase in stocks. Heavy rainfall in northern China may lead to increased corn imports, and U.S. corn is currently competitively priced. Brazil's second crop sales are lagging behind last year's pace, and updated forecasts for Brazil are due soon.

On June 28, the USDA's reports indicated higher-than-expected corn stocks and planted acres, leading to a significant drop in prices. The quarterly stocks report showed 4.993 billion bushels, exceeding expectations by 126 million bushels. Planted acreage was reported at 91.5 million, higher than the anticipated 90.27 million. This surplus in supply signals to buyers that there is no urgency to secure inventories, potentially keeping prices low. Farmers may need to sell more of the 2023 crop to manage storage for the upcoming harvest.

Brazil's corn production is projected to be steady or slightly lower, while Argentina's is expected to decrease. Deliveries against July corn saw activity from major players. Hurricane Beryl's remnants are expected to bring varying rainfall across different states, with dry conditions forecasted for many areas.

Traders expect the WASDE report to show increased carryout figures for both old and new crop corn, reflecting larger stocks and acreage. Analysts predict higher U.S. corn production and favorable weather conditions are driving prices down, despite lower output expectations in South America.

Export sales data for the week ending July 4th is expected to show mixed results for old and new crop corn. The upcoming WAOB report is expected to adjust new crop production estimates based on the June acreage data.

Corn futures did not find significant relief, keeping the market bearish. Prior psychological support was at $4.00, and a close below this level has led to further declines. Bulls need prices to rise above $4.12 to hope for a relief rally. The short-term outlook is expected to remain cautiously optimistic, with potential opportunities in options trading due to reduced volatility.

Data for Technical Analysis (30Min) CFD US Corn Futures - Sep 24 (ZCU4)

Resistance : 402.87, 403.17, 403.67

Support : 401.87, 401.57, 401.07                                 

30Min Outlook                         

Source: TradingView

Buy/Long 1 If the support at the price range 400.87 - 401.87 is touched, but the support at 401.87 cannot be broken, the TP may be set around 403.14 and the SL around 400.37, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 402.87 - 403.87, TP may be set around 404.56 and SL around 401.37, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 402.87 - 403.87 is touched, but the resistance at 402.87 cannot be broken, the TP may be set around 401.84 and the SL around 404.37, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 400.87 - 401.87, TP may be set around 400.54 and SL around 403.37, or up to the risk appetite.       

Pivot Points Jul 11, 2024 03:36AM GMT

Sources: Successful Farming, Barchart