Corn currently is trading about $3.00 per bushel above where it was this time last summer. With tight carry-over from last year and uncooperative weather this year, it may enjoy it for a while longer.
“We had two heavy-weight USDA reports duke it out. The first was extremely bearish and sent us nose-diving and the second was the more bullish that sent us to a point where [at]. Now we’re into this seasonal weather market,” says Robert Chesler, account executive at FC Stone. He says that while corn typically reacts to both weather and outside markets around this time of year, weather has been so dominating that it has been the major factor to watch. In September corn, he puts support at $6.50 and resistance at $7.00. December corn has support at $6.40 and resistance also at $7.00.
Phil Streible, senior market strategist at Lind-Waldock, says last year still is playing a big role in prices. “The major underlying fundamental story is that last year’s corn crop was so tight that farmers had sold forward a ton of corn futures to lock in the higher prices. They’re trying to take advantage of the higher prices for forward corn. The problem was that planting was four to six weeks behind and now the underdeveloped crop is open to weather damage from this hot dry weather,” he says. Streible also says weather is the prime factor to watch. “The downside is very limited, but the bottom could fall out if the weather becomes very favorable,” he says. For September corn, he puts support at the 200-day moving average (currently around $6.30) and resistance at $7.25 and then $7.60. December corn shares the 200-day moving average as support (currently around $6.00) and has resistance at $7.20 but could see prices as high as $8.00.