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Corn futures are positioned to retest 50-day, 100-day and 200-day moving averages. Oliver Sloup examines.

 

May corn was 11 ¼ cents higher settling at 643.  That’s 8 ¾ higher for the week. The new crop December contract tacked on 8 cents, settling at 560 ¼.  Today’s rally and close was constructive on the chart, which keeps the door open for the cluster of major moving averages from 657-662.

May soybeans were able to recoup some recent losses today, with the May contract settling 8 ¾.  This trimmed losses for the week to 48 ¼ cents.  The new crop November contact was 15 ¼ cents higher, settling at 1274 ¼.  Today’s rally brought the RSI to 30.39, which is fractionally higher than what would be considered to be oversold.  Was today’s move a relief rally or is it sustainable?  TBD.  As mentioned in this morning’s report, sharp selloffs like this are often met by sharp relief rallies. 

May wheat staged an impressive day, rallying 26 ½ cents to settle at 688 ½.  This trimmed losses for the week to 22 cents.  Today’s high was 700 ½.  The Bulls will want to see consecutive closes above here to encourage a bigger relief rally. 

 

Volatility in the grain markets is on the rise, which is in line with its seasonal tendencies, based on the CME CVOL index.  For reference, the Corn CVOL index marked a low on February 9th with a reading of 16.75.  As we head into the weekend before next Friday’s prospective plantings report, the CVOL index has risen to 26.44.  Due to the rise in uncertainty ahead of the report as well as after, market participants may consider utilizing CME Groups new crop weekly options to gain market exposure or manage risk. 

Global demand for US corn was a big question since last fall, but over the last few weeks we’ve seen exports pick up in a meaningful way.  We’ve seen flash sales to China reported in 8 of the last 9 days, including one this morning for 204,000 metric tons.  Yesterday’s weekly export sales report showed net sales at 3,095,900 metric tons, or about 122 million bushels.  This was a marketing year high.  China was the primary buyer accounting for 72.5% of the total.

Chart watchers will be looking to see if corn will be able to retest a cluster of major moving averages, including the 50,100, and 200 day moving average, which all come in from 657-662.  This pocket also correlates with the secondary breakdown point from February 24th.

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