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Corn Trends Near Three-Year Low as US Raises Crop Outlook

by on November 8, 2013 10:06 pm BST
 

Corn futures traded along a three-year low as the US, world’s largest grower, will have the largest corn production exceeding 13.989 billion bushels from 13.843 billion, or 351.63 metric tons, according to the Unites States Department of Agriculture (USDA).

Average yields in the US will reach 106.4 bushels an acre, increasing from 155.3 bushels forecasted two months ago.

“Corn prices will likely continue their gradual drift lower,” Chris Gadd of Macquarie Ltd. said. Gadd included that he expected the USDA to increase corn and soybean yield, while corn production is rising to record levels. The USDA reports that 73 percent of the corn crops has been harvested.

The corn December delivery rose modestly over today’s session, up .2 percent. The daily price action has been trading underneath the 20 EMA and trading well under the 50 and 200 EMA signaling bearish sentiment. However, the -DMI has begun to slope downward significantly from the peak, and corn may have a pullback from the lows.

Look for corn to see up side to the 20 EMA, near $433.33.

The 4H chart is looking that a near-term resistance is in place just below the 50 EMA. The Fibonacci retracement shows that price action is hovering the 23.8 percent retracement level. Downside to the 20 EMA of 423.34 is possible.

1D Chart of ZC (Corn futures)

1D Chart of ZC (Corn futures)

4H Chart of ZC (Corn futures)

4H Chart of ZC (Corn futures)