Commodity Market: Corn (October 26, 2023)

Create at 1 month ago (Oct 26, 2023 10:02)

Corn Prices Dip Amid Rising Ethanol Production

In recent market trends, corn prices experienced a modest decrease due to fund and technical selling. The United States is expected to face some near-term harvest delays. Argentina and central Brazil continue to experience dry conditions, while southern Brazil is grappling with excessive wetness. Furthermore, the U.S. is encountering challenges in moving corn due to low water levels on the lower Mississippi River. Similarly, Brazil's second crop shipments are at risk due to low water levels on the Amazon River. On a positive note, ethanol production reached a nine-week high, with the U.S. Energy Information Administration reporting an increase in production and reduced stocks.

The European Union's crop agency, MARS, reduced its corn yield outlook by 5%, attributing this decrease to drought in certain growing regions. In Ukraine, the USDA's attaché estimated higher production for the 2023/24 season compared to the previous year, with reduced exports.

In the U.S., the 2023/24 corn outlook indicates reduced supplies, lower feed and residual use, and smaller ending stocks. Corn production is forecasted at 15.064 billion bushels, with exports reduced due to smaller supplies and sluggish early-season demand. This has led to a decrease in corn ending stocks for 2023/24, and the season-average corn price for producers has been raised.

Globally, coarse grain production for 2023/24 is expected to decrease, but foreign coarse grain production outlook remains slightly positive. Corn production is expected to increase in Argentina, Moldova, the EU, and Paraguay.

Significant international trade changes include larger corn exports for Argentina and Paraguay but a reduction for the United States. Corn imports are lower for Bangladesh. Foreign corn ending stocks have increased, particularly in Ukraine and Moldova.

Regarding corn use for fuel ethanol production, there has been a fluctuation in consumption, with August numbers down compared to the previous month but higher compared to August 2022. Corn consumption for other purposes also showed variation, with a majority used for alcohol production.

In the market, there have been conflicting predictions. While some analysts have been bearish about grain markets, there are indications that commodity prices may find support. The corn market is showing signs of stabilizing, and economic activity in the U.S. and other parts of the world is expected to support the market. Importers like Mexico, Colombia, and South Korea are anticipated to turn to the U.S. for their corn needs. Corn basis has firmed up during the harvest season, suggesting a more positive market outlook once funds decide to exit short positions.

In recent trading, Chicago corn prices rebounded from a two-week low. However, the abundance of feed grain supplies in the market is expected to limit substantial price gains. Earlier, the December corn contract has been trading in a relatively tight range for about ten weeks, with some indications that prices may have bottomed out seasonally. However, significant price rallies remain challenging, and the November crop report may influence the market's direction.

In summary, the corn market has seen fluctuations in prices, influenced by various factors including harvest delays, weather conditions in major producing regions, and changes in production estimates. Despite bearish sentiment, there are signs of support, particularly in the ethanol production sector and the potential for increased international trade. As a result, it could lead to corn prices remaining relatively steady within the overall declining trend, possibly even experiencing slight upward movements during this timeframe.

Data for Technical Analysis (5H) CFD US Corn Futures - Dec 23 (ZCZ3)

Resistance : 480.38, 480.8, 481.47

Support : 479.04, 478.62, 477.95                  

5H Outlook   

Corn Prices Source:                                                  

Buy/Long 1 If the support at the price range 477.55 - 479.04 is touched, but the support at 479.04 cannot be broken, the TP may be set around 480.38 and the SL around 476.80, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 480.38 - 481.88, TP may be set around 482.00 and SL around 478.29, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 480.38 - 481.88 is touched, but the resistance at 480.38 cannot be broken, the TP may be set around 478.54 and the SL around 482.63, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 477.55 - 479.04, TP may be set around 476.80 and SL around 479.63, or up to the risk appetite.       

Pivot Points Oct 26, 2023 02:22AM GMT

Pivot Points
Classic 476.78 477.95 478.54 479.71 480.3 481.47 482.06
Fibonacci 477.95 478.62 479.04 479.71 480.38 480.8 481.47
Camarilla 478.64 478.8 478.96 479.71 479.28 479.44 479.6
Woodie's 476.48 477.8 478.24 479.56 480 481.32 481.76
DeMark's - - 478.24 479.56 480 - -

Sources: Hellenic Shipping NewsProgressive Farmer

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