Corn Smashes 3.750 Resistance and Jumps to Near 1-year High
Corn prices are adding gains on Monday for the sixth consecutive day amid worries about production losses and rising demand. CORNUSD broke the 3.750 resistance to trade as high as 3.820, its highest level since June 4, 2018.
According to experts, the storms in the central US are delaying planting while the drought in South America is affecting corn production. That combination is fueling offer concerns as world corn reserves may tighten in the next months.
Corn jumps to highs since June
Currently, Corn prices are 1.60% positive in the day with maize trading at 3.784. Previously, corn jumped almost 11 cents from 3.720 to break 3.75 critical resistance and to reach its highest level since June 2018 at 3.820. Then, the unit started a consolidation phase.
In the last seven days, corn prices gained almost 15% of value from the 3.338 performed on May 13. Also, fundamental topics like slow planting will support prices in the middle term.
The scoop now if for more gains and in the case the unit keeps levels above 3.750, it will find next resistance at current highs around 3.820. Above there, 3.850 is the next frontier before the 3.950 and the 4.000 psychological level.
Experts believe corn will go up while other agricultural futures will go down. Al Kluis, analyst from Kluis Advisors, believes that “the trade continues to buy corn and sell soybeans on the wet weather pattern, and the thought is that U.S. farmers will plant less corn and more soybeans.”
“The CFTC position report Friday also showed funds a lot shorter than I had expected,” Kluis said in his daily note.
“The USDA Crop Progress Report today will show nationwide corn planting at about 52% complete. I also expect corn emergence to be way behind because of cool, wet conditions.”
So, more gains in corn prices in the next days.
Soybeans resume its advance on Monday
As the week starts, so do soybeans prices. After a negative Friday, soybean prices are trading higher on Monday as the unit resumed its recovery paused last week. However, the unit seems contained for the 20-day moving average again.
As Kluis said before, “the thought is that U.S. farmers will plant less corn and more soybeans,” so prices for soybeans will be pressure to the downside due to oversupply.
On the other hand, it seems like Canadian soybeans are being held in Chinese ports for inspections according to a Bloomberg report. “Members of Canada’s soybean association were informed by Chinese importers that two cargoes will be held at the port of entry until a number of tests for plant pathogens have been performed.”
Canadian Agriculture and Agri-Food Minister Marie-Claude Bibeau said that it has come to their attention that “there are strengthened inspection measures occurring for Canadian products at ports in China.”
The Canadian government is still looking for any official communication from Beijing.
Meanwhile, soybean prices are trading 1.38% positive on the day at 8.200 as the unit has resumed its recovery following a profit-taking Friday. However, the 20-day moving average is acting as resistance again.
Any upside movement in the oilseed will need a break above the 20-day moving average. So, stay tuned as it would be a confirmation for a recovery.
To the downside, soybeans will see supports at 8.100, 8.040, and then 7.800.
This article was originally posted on FX Empire
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