With the outlook for improving crops in Brazil and some rain for Argentine growing areas, the short-term focus appears to be shifting to the extremely overbought technical condition of the market.
Exporters reported the sale of 128,000 tonnes of U.S. corn to Japan and 100,000 tonnes to Israel. The market experienced aggressive selling pressures even with positive demand news and concerns about an independent truck owners strike blocking roads in Argentina as part of protest.
March corn closed moderately lower on the session Tuesday after choppy and two-sided trade early in the session. Ideas that there was enough rain in the forecast next week and enough rain that hit the ground over the weekend helped spark a wave of long liquidation selling.
The COT report showed record high net long positioning in many of the speculative categories. Corn export inspections for the week ending January 14 came in at 876,774 metric tonnes versus trade expectations for 900,000 to 1.25 million tonnes. Cumulative inspections have reached 17,275,616 tonnes, which is 82% above last year. This represents 26.7% of the USDA’s forecast for the 2020-21 marketing year vs. a five-year average of 27.1%.
Given the extremely overbought condition of the market and talk of better weather ahead, the market looks vulnerable to a short-term technical correction. Short-term resistance for March corn is at 525, with support at 503 and 493. Support for the July/December corn spread is back at 55.