Corn prices are stable this morning. Bulls are pointing to hotter temps in the extended U.S. forecast. There's also continued talk of some production problems in parts of Russia and Ukraine. I am also hearing talk of logistical complications continuing to brew inside Brazil. Not only is there labor concerns and wide-spread political unrest, but the record soybean crop and demand to export more soybeans could put increasing pressure on Brazilian corn exports in the months ahead.
Bears continue to point towards ongoing trade headwinds, an overall terrific start to the U.S. growing season, a stronger U.S. dollar, and perhaps a nearby setback in total U.S. demand. Weekly exports were a bit of a disappointment and there's still some uncertainty with ethanol and how Washington is going to play out their cards.
From a technical perspective, it seems like the DEC18 contract is gravitating around the $3.80 area, where it might pause a bit until it learns more about upcoming U.S. weather. Longer-term, a drop of -30 to -50 cents on the downside puts us near the low-range of $3.30 to $3.50 per bushel. A similar +30 to +50 cent to the upside places us back in the high-range of $4.10 to $4.30 per bushel.
The highest point of the recent rally was back on May 24, at $4.29^4. In other words, a $1.00 range of between $3.30 and $4.30 is what many traders are now talking about. I personally think the range is higher, perhaps between $3.50 and $4.50.
I guess it all depends on remaining U.S. weather and trade talk out of Washington...stay tuned!