What the USDA report means for grain prices

What the USDA report means for grain prices

Jan 13, 2018

CORN (March)

 

Yesterdays Close:  March corn futures trade 1 ½ cents lower yesterday, trading in a range of 4 ½ cents on the session.  Funds were estimated sellers of an estimate 13,000 contracts.

 

For the week:  March corn futures finished the week down 4 cents, trading in a range of 6 cents.  Fridays Commitment of Trader’s report showed funds have a net short position of 222,516 futures and options.  Keep in mind that the CoT data is compiled, and funds have likely exceeded their previous record short of 230,556 futures and options.

 

USDA Report in Review

 

Quarterly stocks: 12.516 billion bushels vs the average estimate of 12.431 billion bushels

 

Ending Stocks: 2.437 billion bushels vs the average estimate of 2.431 billion bushels

 

Yield: Increased by 1.2 bushels to 176.6

 

Production:  Increased by .026 to 14.604 billion bushels

 

Technicals

 

March corn futures made new lows yesterday but managed to close above technical support which we have outlined as 345-346 ½ for some time now.  Though we have been range bound for the better part of the last 5 months, the bears have the edge as lower highs and lower lows have been the trend.  If we see a break and close below 345, we would expect to see a continuation towards 334-335 ¼.  The only silver lining for the bulls is that the funds could spark a rally from short covering.  If you’ve been banking on this for a while you’ve been disappointed.  The funds previous record short position was reduced by 70k contracts and the market only rallied roughly 4 cents off of contract lows.  If funds start reducing, it doesn’t mean the flip.  The trend is your friend, and right now that is sideways.  We continue to feel that….Please sign up for a Free Trial at Blue Line Futures in order to view our entire technical outlook and proprietary bias and levels.

 

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