June 22, 2018
Corn prices are stable this morning. Bulls are pointing to hotter temps in the extended U.S. forecast. There's also continued talk of some production problems in parts of Russia and Ukraine. I am also hearing talk of logistical complications continuing to brew inside Brazil. Not only is there labor concerns and wide-spread political unrest, but the record soybean crop and demand to export more soybeans could put increasing pressure on Brazilian corn exports in the months ahead.
Bears continue to point towards ongoing trade headwinds, an overall terrific start to the U.S. growing season, a stronger U.S. dollar, and perhaps a nearby setback in total U.S. demand. Weekly exports were a bit of a disappointment and there's still some uncertainty with ethanol and how Washington is going to play out their cards.
From a technical perspective, it seems like the DEC18 contract is gravitating around the $3.80 area, where it might pause a bit until it learns more about upcoming U.S. weather. Longer-term, a drop of -30 to -50 cents on the downside puts us near the low-range of $3.30 to $3.50 per bushel. A similar +30 to +50 cent to the upside places us back in the high-range of $4.10 to $4.30 per bushel.
The highest point of the recent rally was back on May 24, at $4.29^4. In other words, a $1.00 range of between $3.30 and $4.30 is what many traders are now talking about. I personally think the range is higher, perhaps between $3.50 and $4.50.
I guess it all depends on remaining U.S. weather and trade talk out of Washington...stay tuned!
About the Author(s)
Kevin is a leading expert in Agricultural marketing and analysis, he also produces an award-winning and world-recognized daily industry Ag wire called "The Van Trump Report." With over 20 years of experience trading professionally at the CME, CBOT and KCBOT, Kevin is able to 'connect-the-dots' and simplify the complex moving parts associated with today's markets in a thought provoking yet easy to read format. With thousands of daily readers in over 40 countries, Kevin has become a sought after source for market direction, timing and macro views associated with the agricultural world. Kevin is a top featured guest on many farm radio programs and business news channels here in the United States. He also speaks internationally to hedge fund managers and industry leading agricultural executives about current market conditions and 'black swan' forecasting. Kevin is currently the acting Chairman of Farm Direction, an international organization assembled to bring the finest and most current agricultural thoughts and strategies directly to the world's top producers. The markets have dramatically changed and Kevin is trying to redefine how those in the agricultural world can better manage their risk and better understand the adversity that lies ahead.
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