Commodity Market: Corn (October 5, 2023)

Commodity Market: Corn (October 5, 2023)
Create at 2 months ago (Oct 05, 2023 10:43)

Corn Market Declines in Tight Range, Eyes Short-Covering and Varied Yields

The corn market experienced a modest decline due to fund and technical selling, with expectations of favorable harvest progress. Reports on yields varied, with some surpassing USDA projections. Ethanol margins dipped, though they remained positive. U.S. Energy Information Administration data indicated steady production at 1.009 million barrels per day, a year-on-year increase of 120,000, and stocks at 21.884 million barrels, up by 199,000 from last year.

Corn futures were slightly mixed, with the December contract showing a 7 ¼ cent range. The corn market has been in a tight range, prompting observations of a potential lack of sellers and signaling a need for aggressive buyers to define the upside.

Despite large net short positions by funds in corn, there's anticipation of short-covering ahead of USDA data releases on supply, demand, and production forecasts. A private corn export sale to Mexico was announced, and Brazil's crop estimates were slightly adjusted. Concerns persist over export demand, with corn sales down 3%. The strong U.S. dollar and global competition may limit reaching USDA export targets.

Rumors of Ukraine selling corn to China emerged, while demand for ethanol provided some optimism. Traders monitored fund activity, noting a net selling trend in corn contracts. The agricultural sector's long exposure by money managers dropped to its lowest since 2019.

The producer's best-case scenario hinges on decreasing yields and a demand rebound, while the worst-case scenario involves a crop size rebound coupled with disappointing demand. The market remains dynamic, waiting for key factors to drive a breakout from the current trend.

Data for Technical Analysis (1H) CFD US Corn Futures - Dec 23 (ZCZ3)

Resistance : 485.90, 485.98, 486.13

Support : 485.60, 485.52, 485.37                    

1H Outlook       

Corn pricesSource:                                       

Buy/Long 1 If the support at the price range 484.60 - 485.60 is touched, but the support at 485.60 cannot be broken, the TP may be set around 486.00 and the SL around 484.00, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 485.90 - 486.90, TP may be set around 487.30 and SL around 485.10, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 485.90 - 486.90 is touched, but the resistance at 485.90 cannot be broken, the TP may be set around 485.60 and the SL around 487.40, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 484.60 - 485.60, TP may be set around 484.18 and SL around 486.40, or up to the risk appetite.       

Pivot Points Oct 5, 2023 03:04AM GMT

Pivot Points
Classic 485.24 485.37 485.62 485.75 486 486.13 486.38
Fibonacci 485.37 485.52 485.6 485.75 485.9 485.98 486.13
Camarilla 485.78 485.81 485.85 485.75 485.91 485.95 485.98
Woodie's 485.32 485.41 485.7 485.79 486.08 486.17 486.46
DeMark's - - 485.69 485.79 486.07 - -

Sources: NasdaqFarm Progress

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