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Commentary
Another slow session for the corn market to round out the week. Corn futures volumes continue to decrease in recent weeks as the Chinese agreement Ag trade has cooled significantly. Still, bulls showed fresh confidence as the sell-off in crude eased and the latest U.S. consumer price index showed tamer-than-expected inflation. As the year winds down, look for low volume trade around the holidays and as traders look toward USDA’s January Production Report. In Brazil, a late-planted soybean crop will bring a particular focus on safrinha corn plantings. There are rumors circulating that Brazilian producers are adopting grain sorghum as an alternative to corn, especially if the corn might be planted late. A few “ifs” and “maybe’s” there. Feed production of corn replacing wheat in China has been reported from the Chinese animal feed industry with corn making up for 43.8 percent of the feed ration in October vs 33.8 in September. Chinese corn futures are up over 4 percent on the month. This has spread rumors to potential future demand for US origin. Technically March corn needs to hold 4.35/37 on breaks. Should support fail, next support is 4.29, then 4.25. IF those levels can’t hold, its katy bar the door to 4.09/4.12. Resistance is 4.45 and 4.49. We need consecutive closes over to run to 4.58 and then 4.67.
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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