Grains shares finished firm on Friday as speculators put a premium on the weather ahead of the weekend. Corn rose 16¢ in July to close at $6.09, above key moving averages and the psychological level of $6. Corn in December closed 1,114 cents higher at $5.4115. Weekly, corn rose 5 cents in July and 6 cents in December. Soybeans also closed 23 cents higher at $13.52 in July and rose 14 cents in November.
Despite a volatile week, Garc Group President Jerry Gurk said he was encouraged by Friday’s higher closing prices of corn and soybeans near all-time highs. This suggests that the weather market is still in its early stages and has not lost momentum. But this week’s price action reflects the volatility typically seen in weather markets, he said.
So where will the market go from here? Of course, that depends on the weather and whether dry weather continues in the long-range forecast for much of the Corn Belt. Gurke said there is room for significant upside, especially in a situation where funding is scarce at grain complexes.
How high can the price go and can December corn break the $5.50 resistance on the chart?
“Beyond this, you have a full-blown weather problem,” he says. Gurke predicts that if the weather remains dry after mid-June, yields will decline, making it difficult to reach the record 181.5bu. USDA predicted yield per acre.
He said the national average corn yield will fall below the trend line to 179 copies. Per acre, it will have a bullish impact on the market. Prolonged drying periods reduce yields to 176 bu. Per acre, a real firework display can bring the market to over $5.50.
“Of course, the December corn high from October 2022 to February 2023 was over $6.A hose is a mark on the chart made under various basic circumstances. And now we have to make a case for what $6 corn is compared to two months ago before we knew all of this,” explains Garc.
He advised clients to unhedge December corn at $4.90 and take profits in mid-May. Now he’s waiting for a place where he can re-enter the market. He watches chart movements to provide that signal, and if corn fails to close Friday lower or higher for the week, it indicates the market is starting to lose momentum. said it was possible.
“We don’t want the market to end at this week’s low,” said Gurke.
Going forward, the market needs to make more highs and lows to show the trend is still intact, he said. The real key is the weekly closing price. “We need to close higher, even if it’s a small amount, and never go below last week’s low. Next week’s boundary on the sand is the $5.10 to $5.12 area, Friday’s close. It’s nearly 30 cents less than .” Doing so eliminates the weather premium.