Afternoon Corn: Six month high for March Corn
<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 Christmas spirit alive today, extending the pre-holiday rally with extra gusto. Corn settled the day with 4-5 cent gains in continued thinner holiday markets. March Corn closed at a six month high. Funds probably added to their length today; we estimate they are now net long 175,000 delta-adjusted contracts. The weekly CFTC report will be delayed to Monday. Cash corn trade remained steady/easier.<br> <br>To little surprise, the day after Christmas was a light news day. A strong rally in meal helped parlay an unremarkable steady/better start into something a little more exciting. The ensuing rally and a less populated price ladder likely helped corn run some stops near recent highs above $4.50. So, we see today’s action less based on fundamentals and more due to the holidays, technicals, and market positioning. South American weather remains little changed; Brazil stays well-watered, while Argentina trends dry into the new year. There is some rain in the forward outlook for Argentina, but not all areas are expected to benefit.<br> <br>The weekly export sales report is due early tomorrow morning. We expect corn sales will maintain recent trends, likely improving slightly upon the prior week’s ~1.2 mmt tally. There were no 8 AM sales today, and not unusually, export news was quiet over Christmas.<br> <br>The weekly EIA report is due out later tomorrow morning. We think ethanol production likely holds about steady wk/wk. Blender demand is likely to improve ahead of Christmas travel, and exports probably ease off recent highs. Under that scenario, ethanol stocks should build modestly, likely to the tune of around +1% to +2%. Ethanol futures were quiet today; we think an average Midwest producer is breaking-even or perhaps losing a little money, net of all costs.<br> <br>Elsewhere, the big macro was quietly mixed to start the week; the US Dollar was a little easier, but so were many stock indices and energy. Cattle rallied somewhat impressively, gaining $2-3, while hogs and milk hewed close to the flat line. Chinese ag data reported Nov’s sow herd of 40.80 mln head was -1.9% below the year ago month. Rhode Island recalled a batch of cat food that tested positive for bird flu?<br> <br>In the options, the January serial contract expires tomorrow on the close. Calendar spreads softened a little for a second day. Corn lost a little ground to both beans and wheat. Eyeing the charts, post- WASDE trade confirmed meaningful resistance at $4.50 in March Corn, which we closed above today. Will see if there is follow-through? Our support zone in the $4.35 neighborhood remains operative after a hard test last week. Corn is starting to get a little overbought, testing the upper Bollinger Band with the RSI nearing 70. The weekly chart is still in a positive mode; momentum indicators are pointed up, and there is still an open gap higher that remains unfilled.<br> <br>KJ </span></div></div>