MarketsFarm — Corn futures on the Chicago Board of Trade may be due for a rally.
The March corn contract hit $3.92 per bushel three times earlier in the month, facing stiff resistance to break higher (all figures US$). Prices established lows last week, around $3.7525.
“I would like to see resistance be taken to the $3.94-$3.97 range,” said Scott Capinegro of Barrington Commodities ar Barrington, Ill. If China happened to buy some corn, prices could break out into the $4.02-$4.04 range.
“We’re just sort of stuck in 20-cent trading range.”
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Commodity prices had little— if any— reaction to the official signing of the Phase One trade agreement between the U.S. and China last week.
“The trade is trying to make the China deal not significant, but it is significant,” Capinegro said. “Rumours can turn into reality very quickly.”
The China deal, as well as a previous deal with Japan and the expected ratification of the U.S.-Canada-Mexico agreement are all providing underlying support, he said.
“Our 2020 demand should be better than 2019.”
Corn prices are also strongly underpinned by a lack of selling anxiety for producers.
“The farmer isn’t really forced to sell, because they’re getting some farm payments” from the U.S. Department of Agriculture, Capinegro said.
“But this coming year, those payments are going to be gone because of the trade deals.”
CBOT market participants will also be watching for planted acreage reports, as well as movement with the U.S. dollar and growing conditions in South America.
— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.
