Afternoon Corn: A strong close to the week for corn futures
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><div style=\"line-height: 1;\"><span style=\"font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\">Afternoon Corn: <br id=\"isPasted\"> <br>Corn futures kept the rally fires burning a second day. The market was firm nearly start to finish, settling 3-5 cents higher Friday. The weekly corn chart reflects a gain of 16 cents, as the March Corn contract ‘earned its carry’ following Dec expiration last week. Cash trade was steady/mixed today at levels that are slightly below recent highs.<br> <br>A mixed start to the week notwithstanding, the corn market performed well the past couple of sessions, broadly ignoring macro drama. One supportive factor has been limited consumptive buying on the 10-15 cent pullback off the Dec WASDE highs. Colombia was back in at 8 AM today with a 150,000 metric ton U.S. corn flash purchase, and Korean buyers have been picking away at small lots all week long (optional origin). After the close, the market received another dose of good export news; the USMCA dispute panel found in favor of the U.S. regarding Mexico’s restrictions on GMO corn imports. We will see how Mexico responds; no doubt the issue will also eventually fold into broader discussions on Trumpian tariffs and trade between the two neighbors.<br> <br>CFTC Disaggregated Commitment of Traders report after the close did not offer major surprises for corn. Managed Money were small net sellers for the week ended 12/17 (Tues); Commercial traders and smaller non-reportable traders were also net sellers, likely reflecting hedging of farm-sold bushels. “Other participants” were the offsetting buyers. When including recent activity, we think funds are heading into the weekend net long roughly 165,000 delta-adjusted corn, which is nearly a two year high.<br> <br>Elsewhere, Congress was rushing through another bill designed to avert a gov’t shutdown. We will see if the third time is the charm? Weather worries remain relatively muted; Argentina turns a little more dry, but it is not expected to be accompanied by excessive heat, which should help preserve soil moisture to some extent. Brazil is expected to stay better watered? There was less pressure on the big macro today; the dollar eased up, stocks bounced, and energy markets overcame early losses to close near the flat line. The improved sentiment also appeared to buoy end-user markets; hogs, cattle, milk, and ethanol, all closed higher today. Cattle on Feed report found ‘on feed’ inventory near expected at 100% of year earlier, but both placements (at 96%) and marketings (at 99%) came in 1% above estimates. A little friendly to feed demand? If a gov’t resolution is reached, Quarterly Hogs and Pigs data is due for release Monday afternoon, capping off a brisk week of meat data.<br> <br>In the options, volatility held about steady heading into the weekend. Calendar spreads were firm a second day. Corn was fairly even on the beans (2-to-1) but continued to gain on the wheat. Eyeing the charts, post-report trade confirmed meaningful resistance at $4.50 in March Corn. Our support zone in the $4.35 neighborhood held the break. Corn is not yet especially overbought with an RSI near 60. The weekly chart is still in a positive mode; momentum indicators are pointed higher and there is a short-term uptrend in place.<br> <br>KJ </span></div></div>