Corn Fundamental Support
Corn found light support from both the wheat and bean markets yesterday.
First, the KC wheat started with a bounce from the cold weather fears over the weekend and corn followed on moderate volume. Later on, beans bounced, helping to put a second round of support into the corn market yesterday. Even with both rounds of support, the May corn stayed 2 1/4 cents shy of the 100-day moving average where major resistance would be expected again.
Unless a major news story or report is seen, it will be likely that this 100-day moving average could stop a couple more bounces before it is broken. This market remains in a very narrow trading range. It is too early for seeing any pre-report selling for next week's report, yet there isn't enough bullish news to spark large scale fund short covering.
Friday's COT report did show that funds finally started covering a few shorts, but only on a light basis. Let's look for that pattern to continue where funds short cover but do so with the goal of bouncing this market as little as possible.
- Mild fund short covering looks to continue but the scale should be limited in an attempt to avoid a large corn bounce while doing so
- While it might be early to talk direct corn weather issues, corn can still benefit from wheat weather concerns
- Once again the 100 day moving average acted as a general area of resistance, for May that crossed yesterday at 372 1/2
- today we would expect a normal "turnaround Tuesday" type of setback that could be a good opportunity for short term sellers