Current market dynamics for corn to linger into 2023
Mar-23 futures settle at $6.6625 ahead of the holiday weekend. On Wednesday, Dec. 21, the contract settled above the 20-day moving average for the first time since early November and managed to hold on to higher values during quiet trade yesterday and today. RSI was around 49.4 percent.
S&D and fundamental factors
Weekly corn export sales continue to remain well below last year by some 48 percent, which has led USDA to lower the 2022/23 export target several times. Influential to exports longer term was news last week that Mexico will postpone the ban of U.S. GMO corn until 2025. Previously, the target was 2024.
Weather, macro indicators, and news
While the U.S. deals with a powerful winter storm with frigid temperatures as far south as Texas, weather in South America remains largely unchanged. Brazil has received adequate rainfall with record corn and soybean crops still very much attainable. Argentina remains dry and hot, unfavorable for corn. Some rain is possible in early January, but it will likely be too little too late to erase some crop loss. USDA’s 55 MMT corn estimate for 2022/23 is too high and will likely come back closer to 50 MMT in Q1.
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