(Wall Street Journal) – U.S. corn futures are trading lower Monday, reversing early price gains on signs of chart based technical weakness.
“The market is having a technical reaction to the July contract’s inability to push above prior highs on technical charts,” said Joe Vaclavik, president of brokerage Standard Grain Inc. in Chicago.
The inability of the market to attract buying once futures traded up against highs from March was viewed as a negative signal for chart based traders.
“A lot of traders holding weaker bets that prices would push higher are getting out of the market,” Mr. Vaclavik said. There is nothing new that is impacting market fundamentals, but traders are cautious ahead of the first glimpse of condition rating from the U.S. Department of Agriculture this afternoon, he added.
Market watchers said large speculative funds rolling out of July contracts added to the selling pressure.
“The fund roll helped defuse buying in the market,” said Art Liming, futures specialist with Citigroup Global Markets Inc. in Chicago.
Wheat futures dropped in unison with corn, with traders taking profits on recent gains. Corn and wheat often trade in unison, as both are used as feed in livestock rations.
Chicago Board of Trade July corn is down 16 1/2 cents, or 2.5% at $6.45 1/2 a bushel, and July wheat was down 8 1/4 cents, or 1.2%, at $6.97 1/4.
