We are probably going to continue to see plenty of upward momentum.
Corn futures markets dipped a bit on Tuesday as we continue to see grains take center stage. The recent invasion of Ukraine by Russia has put grains into the forefront, as wheat has skyrocketed. Corn has a little bit of a “knock-on effect”, as the idea is that if wheat markets continue to see massive push is to the upside, then some staples will switch to the corn market.
That being said, it should be noted that China has recently been a big buyer of the grain markets in the United States, taking full delivery. They have also been buying a lot of farmland in the middle of the country to grow food. Russia and Ukraine provide quite a bit of the food for China, so they have been active in all markets.
Commodities, in general, have been very strong, so it makes sense that corn would continue to rally. It will be interesting to see how this plays out over the long term because Europe is much more threatened by the Ukraine situation than anything else. The United States will have no issues simply because they can supply themselves. The parabolic nature of this move does suggest that corn probably has further to go, but I would love to see a move back towards 700 to find a little bit of value. Whether or not we get that might be a completely different situation, as the market has turned around after the initial selloff during the day to form a bit of a hammer.
You cannot be a seller of this market anytime soon, but as soon as we see some type of cessation of fighting in Ukraine, it is likely that most grain markets will fall apart. In the short term though, it certainly looks as if we are heading towards the 800 level rather quickly, so if you are a short-term trader, it is very likely that you will get long at this point, but if you are more of a longer-term trader, you want to see a swing lower to take advantage of this.
For what it is worth, the market has found support at the previous high, so it does suggest that we are probably going to continue to see plenty of upward momentum.