Corn bulls were happy to see the JUL18 old-crop contract close at its highest level ($3.94^4) since August 15th of last year. The new-crop DEC18 contract also posted its highest close during that time period at $4.06 per bushel.
The obvious 800-pound gorilla in the room is South American production and how much it will ultimately be reduced. The Brazilian production number seems to be more of a guessing game, with total planted second-crop acres still being highly debated. Last month the USDA left their Brazilian production estimate at 95 MMTs, I don't even have a guess of how much they will reduce it in this months report, but I'm in the camp their production ultimately ends up sub-87 MMTs.
How we get there is anyone's guess!
As for Argentine production, last month the USDA lowered their estate form 42 down to 39 MMTs, but it looks like further reductions are in order. In fact, several sources are thinking total Argentine production could ultimately fall to between 29 and 33 MMTs. Strong demand is also helping to keep prices supported. Thursday's USDA report should help provide more details and paint a better picture.
Technically, the JUL18 contract continues to see stiff resistance up between $3.95 and $4.00 per bushel. The DEC18 contract is looking at stiff nearby resistance up between $4.10 and $4.20 per bushel. As both a spec and producer I remain a longer-term bull, but believe it could take time to breakout to the upside.The funds are clearly taking a more bullish macro stance, demand for corn is extremely strong and weather in both South America and here at home are still big wild-cards. I see no reason to get in a big hurry reducing additional price risk.
Those who feel they are behind in pricing bushels need to get caught up. End-users need to make certain you are protecting yourselves. I will continue to keep a close eye South American weather and the upcoming USDA report.