The corn market roared back to the upside this week with July corn values closing nearly 80 cents above last Friday’s settlement price. This week the corn market had erased its liquidation break that had begun two weeks ago. The corn market found support from a strong cash market as well as a renewed focus on near-term demand.
The weekly ethanol data showed that the amount of corn used last week to produce ethanol had climbed to its highest level in six weeks.
In addition to the solid fundamental news this week, there was evidence that the funds were aggressive buyers of all of the grains when corn, soybean and wheat all crossed their 50-day moving averages. The function of the market continues to work. When prices rose towards their highs of early April, evidence of demand destruction was revealed. When values slipped last week to the lowest levels in two months, signs of a pickup in demand were uncovered.
There were rumors late on Friday that Russia may re-enter the world wheat trade as early as Monday. This news will have to be monitored over the weekend, as it could lead to a break in wheat and a correction to corn and soybeans to start next week’s trade. Look for all of the grain markets to be bound by its recent trading range through mid-June.
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