Grain Express

Corn (May)

Fundamentals: A flash sale of 114,300 metric tons to Mexico coupled with winter weather moving through parts of the Midwest helped send corn futures made new contract highs yesterday, which spilled into new highs in the overnight session. Futures have since retreated about 7 cents from those highs at it appears a lot of the new bullish news may be priced in for now.

Technicals: May corn broke out above the old contract highs which led to a wave of accelerated buying, both momentum traders and short covering. Something we have talked a lot about over the last 3 months is the funds position limit being increased by the exchange, which gives them powder to add to what is already a near record position. On the other side of that, commercials and producers are near record short, which could add fuel to the fire via short covering. There is no significant technical resistance in uncharted territory as it becomes an emotional momentum trade. The RSI is at 69.14, near overbought, but well below the reading we saw on January 14th, 89.99.