Corn prices maintained Monday’s gains as they strived for a bullish breakout past last week’s high. On Tuesday, the agricultural commodity was trading at $552.80, up by 0.93%. The prices found support in USDA’s bullish figures on US corn sales to China and the supply concerns from Brazil.
US corn sales to China
On 16th March, the agency announced that the Middle Kingdom had booked 1.156 million tonnes of corn from private exporters within the US. The figure is the highest purchase of US corn that China has made since late January 2021. On 29th January, the USDA announced that China had purchased 2.1 million tonnes of corn from the country. This was the second-highest number in history.
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The agency has further forecasted that China will buy a record 24 million tonnes of the produce from various corn-growing countries in the course of the 2020/21 season. This comes as the country strives to rebuild its hog herd.
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Brazil’s corn supply
Corn prices are also finding support from concerns over Brazil’s crop supply. Investors whose interest is to invest in commodities acknowledge that weather is a key driver of prices in the agricultural sector. The unfavourable weather conditions in the South American country have resulted in delayed planting of the second corn crop of the season.
In its weekly report, Conab indicated that as at 12th March, the exercise had been completed in 71.5% of the forecasted area under cultivation. The figure is lower than the 88.0% attained during the same period in the past year.
The second corn crop is usually planted between February and March after the harvesting of soybeans. This year, the unfavourable weather caused delayed planting and harvesting of soybeans in Center-West and South areas. This has in turn hampered the planting of corn and fueled the rise in corn prices.
Corn prices technical outlook
After trading below the 25 and 50-day exponential moving averages since last week, corn prices are above the EMAs in today’s session. On the four-hour chart, the 25-day EMA has crossed over the 50-day one on the upside as the prices strive to break past last week’s high of $556.08. Upon breaking out past that level, the next target will be the higher resistance level of around $560.13. Above that, corn prices will test this year’s high of $572.51.
On the flip side, the prices are likely to hit the prior resistance level of $539.45. The bears may also test the support level of $530.52.