Potential for a Reversal: Is a Short-Covering Rally Brewing in March Corn Futures?

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There’s no beating around the bush – the fundamentals for corn remain bearish ahead of
Thursday’s USDA report. Last month, USDA caught many by surprise revising ‘23 corn yields to
record-highs of 177.3 bushels per acre. Since then, corn futures have continuously grinded
lower. But, could a short-covering rally be in the offing soon?


Per the last CFTC Commitments of Traders report, managed money funds have
amassed a net-short position of 280,151 contracts (combined futures & options). That
represents the largest net-short position in corn since 2019. While corn has continued making
new lows, each of the last 4 contract lows have come in conjunction with less and less
conviction – namely bullish divergence on the standard 14-day RSI. Moreover, the volume profile
has gradually softened since the January USDA report. Thus, it’s possible that all of the bears
have already sold. The first step in a short-covering rally is getting bears to stop selling – and a
friendly WASDE report on Thursday bares the potential to make that happen.


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Futures trading involves a substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians, or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy, and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third-party application. Blue Line Futures employees use only firm-authorized email addresses and phone numbers. If you are contacted by any person and want to confirm your identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

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