(Farm & Ranch Guide) – The corn market continued to show strength in early June, as soybeans moved yet higher based on South American shortages.
The CME Group corn futures settled on June 6 with July at $4.27, September at $29, December at $4.295, March at $4.35 and May 2017 at $4.38 per bushel.
The market was offering about a 8.5-cent carry between December and May 2017.
Compared with prices back on May 19, July was 38 cents higher, September was 37.5 cents higher, December was 33.5 cents higher, March was 31 cents higher and May was 30 cents higher.
In the July 2016 futures contract, the bid on June 1 of $4.14 took out the May 27 high of $4.135.
The nearby future closed near its high at $4.27 per bushel.
Prior to these higher jumps, traders were watching a $4.07 per bushel target price that was the high back on April 21, said Monica Moehring, Allendale technical analyst.
“Just glancing at this chart (Corn July 2016) in the bigger picture, we’ve got plenty of room to pull back here and challenge some of these support levels and still hold up the uptrend overall,” she said during an Allendale Ag Leaders monthly webinar seminar.
Moehring said the first area of support for the July contract (on June 1) was $4 – the 10-day moving average; more support at $3.95; and the 20-day moving average at $3.905.
“If we start breaking at some of these levels, we would break at the most recent short term uptrend, which is pretty steep – but overall, we would have to break $3.775, which is where the long-term uptrend crosses, to really tell me that we are in a neutral-to-lower-pattern here,” she said.
She added that in the July contract, $4.135 was the first resistance, and then we have to go back to last September with a high of $4.21 per bushel.
“Keep that in mind as we go through the next 30 days and get into this key seasonal timeframe,” she said.
“If we do pull back, it might be a decent short-term buying strategy – nothing for the longer term – take shorter-term profits here and there when you can. Don’t try to shoot for the moon,” she suggested. “With 10-20 cents profit here or there – is probably the way to go until we get further on in the growing year and see whether or not we can hold this.”
According to one marketing report featured in “Iowa Farmer Today,” corn bids were moving higher based on a drop of 7 million metric tons (276 million bushels) in Brazil’s corn exports.
Demand appeared to be real, based on the cash bid of $3.78 with a basis of 49 cents under on June 6 at one elevator in western Minnesota followed in this column.
The basis was 8 cents narrower, and the price was 45 cents higher than back on May 19. Farmers were last offered a cash bid of $3.66 back on July 17, 2015. The basis was last 49 cents under in early December 2015.
The National Ag Statistics reported 98 percent of U.S. corn was planted by June 6, 2016, compared with a five-year average of 97 percent.
Emergence was 90 percent compared with the average of 86 percent.
The crop was rated 75 percent good to excellent, 21 percent adequate and 4 percent poor to very poor. The numbers were similar to a year ago, when the numbers were 74 percent good to excellent, 22 percent adequate and 4 percent poor.
Traders and the corn industry will keep a close eye on corn development – especially to watch if pollination can occur ahead of a predicted hot July for the United States. The Climate Prediction Center gives equal chances for above-normal, normal or below-normal precipitation in July. There is a 40 percent chance that temperatures in the Midwest will move above normal, with a 50 percent chance for dry conditions in Illinois and the East Coast.
