Sometimes fundamentals of supply and demand differ greatly from technical patterns seen on price charts. But as the corn market begins a crucial week, both fundamentals and technicals agree: Something's gotta give, and it's easy to see what.
Farmers must have 65% to 70% of their corn planted in a week to avoid a drop in yield potential. If the crop gets in, good soil moisture and summer weather forecasts suggest the results will be more than enough to satisfy global demand. If not, prices should work higher to encourage growers to keep planting past the optimal date to ensure enough acres are sown to offset any yield reduction.
This fundamental equation is easy to spot on the price chart for December futures, which has traded in a narrowing wedge over the winter and spring. Friday's big rally left new crop bids right at the top of two resistance lines: one off 2009 highs, the other off the historic July top. Either the market breaks out on continued planting delays, or drops back down to test support just below $4.
To read Bryce Knorr's complete weekly corn review, click HERE.
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