Afternoon Corn: Longs managed their risk Friday; still higher for the week
<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 encountered some probable geopolitical hedging in front of the weekend, which kept the market under modest pressure. Old crop corn futures ended the day 6-8 cents lower, while later-dated new crop positions lost 3-5 cents. Corn still closed 5 ½ cents higher for the week. Cash trade was quiet/steady.<br> <br>Many markets held a decidedly ‘risk-off’ attitude at week’s end. Like last Friday, there was a whiff of tariffs in the air. President Trump said today he was considering unspecified ‘reciprocal’ tariffs, with details likely to come next week. While we doubt if such chatter prompted an outright rush for the exits, it likely stimulated some risk management in markets with over-extended longs. Equities closed the day around -1% lower, and fat cattle remain more than -5% below recent highs. The US Dollar closed a little higher for the day but was still slightly lower for the week.<br> <br>CFTC Commitment of Traders data after the close did not offer any surprises for corn but did illustrate the above point about length to defend. For the week ended Feb 4<sup>th</sup>, Managed Money traders were net buyers of 13,495 corn contracts, which was near our estimates. The commercial was the main seller (small non-reportable traders sold some, too). When including recent activity, we think funds are heading into the weekend net long 365,000 delta-adjusted corn.<br> <br>Elsewhere, end-user markets were mostly steady Friday (milk was the exception, finishing materially lower). Export news was mostly quiet. Korea’s KFA bought a cargo of optional origin corn overnight, one day after their friends at MFG passed on two cargos. Thailand is still looking for feed wheat and Algeria for South American corn. South American weather will remain of interest next week, particularly the likelihood of more aggressive safrinha (second) crop planting in Brazil. Argentina received million dollar rains mid-week but coverage was not universal. The USDA may begin to opine on South American production Tuesday in their Feb WASDE balance sheet update?<br> <br>In the options, volatility softened a touch as we move farther away from the highs. March options expire in two weeks. The Goldman Roll is underway and applied some pressure to spreads; over 100,000 H/K traded today. Corn was not majorly changed versus the beans but did lose to the wheat. Looking at the charts, this is the second attempt in as many weeks to dislodge $5, which continues to loom as resistance. Corn has been well supported on weakness, including on today’s lows. Initial support moves up to $4.85 in CH, with more critical levels around $4.70-4.75. The daily RSI is in a neutral spot (50’s). Dec ’25 should feature some resistance around $4.70-4.75, which held overnight strength. CZ support at $4.55 remains operative.<br> <br>KJ </span></div></div>