Friday, June 9, 2017

December 2017 Corn Market Technicals and Fundamentals (6/9/17)

This week there was some excitement in the new crop corn market. We saw a price breakout from the sideways pattern that we've been following since the beginning of the year reaching a 6 month high of $4.09 on Thursday (June 8) with heavy trading volume behind it. With a current RSI indicating this is not yet a top on the daily chart (although the 9 day RSI could indicate an overbought signal).  The MACD shows the beginnings of a bullish crossover starting just at the start of the month. With the wet spring, significant replantings, and possibilities of some dryer weather ahead (adding stress to later planted corn with shallow roots due to earlier wet weather as well as patchiness in stands related to replants, compacted sidewalls, and nitrogen loss) we could get some fundamental weather related support behind this, although there were no surprises in Friday's WASDE report. The latest crop progress reports indicate a stark contrast in conditions for good to excellent ratings when you compare the top corn producing states like Iowa, Indiana, and Illinois vs states like Kentucky.

Crop Conditions % Good to Excellent
IL 59
IN 46
IA 77
MI 77
KY 82

Additionally funds have been very short on corn and could be poised to start covering as we go. With just a few days into this trend, the ADX is still indicating weak trend. We'll see where we are sitting with the weekly and monthly charts in the coming weeks, as well as June acreage report and crop conditions as the season progresses.

***This commentary is provided for descriptive and entertainment purposes only and is not intended to be used for specific trading strategies or interpreted to be investment advice. ***** 

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