Corn Prices Slip Though Supplies TightenOptions Xpressupdated Oct 17, 2012TweetAt GET.com we maintain complete editorial integrity on our content & provide transparent & unbiased information. Companies don't pay us to include their products although we receive a compensation when you successfully apply to products from our partners. See how we make money here.At GET.com we maintain complete editorial integrity.Wednesday, October 17, 2012 Corn futures trade may be entering a quiet period, as weak exports but tight domestic supplies have kept prices within a relatively narrow price range compared to earlier this year. Price weakness in both Wheat and Soybeans may see some spillover into Corn prices in the near-term.Fundamentals After a "bullish" USDA crop production and supply/demand report came out last week and sent December Corn futures up nearly the 40-cent limit, we now see prices beginning to recede, with front-month futures once again trading below 750.00. Some analysts cite continued weak export sales as the catalyst for the recent price decline, as U.S. exports are running well below the 395,900 ton average needed to reach USDA projections. Many traders believe prices will need to move lower to help stimulate foreign demand. Ethanol profit margins are negative, which is also slowing demand for Corn for use in fuel. There also have been reports that some livestock producers have started to look to South America for their Corn needs, with rumors of a large purchase from Argentina scheduled to be delivered by the end of the year. However, in the U.S., Corn basis levels remain strong, as producers are more than willing to store the newly harvested crop, with hopes of even higher prices later this year, than they are to move Corn to market. This is manifesting itself in futures prices, with the December 2012/March 2013 spread moving to a slight backwardation lately, which may be an additional sign that commercial buyers are attempting to lure Corn out of producers' hands. For the rest of the year, we may start to see Corn futures move towards more range-bound trading, as rallies near 800.00 may further reduce demand and cut-off more U.S. export business, while a move near 700.00 will likely find more willing buyers but few sellers given current tight global supplies.Technical Notes Looking at the daily chart for March Corn, we notice prices becoming more volatile the past two weeks, as position-squaring ahead of the release of the USDA figures and the market's reaction after the release of October crop report triggered active two-sided trade. Prices are trading on both sides of the 20-day moving average (MA), but remain well above the longer-term 200-day MA which is currently about $1 below current price levels. The 14-day RSI has turned weak, with a current reading of 42.28. The recent high of 775.75 made on October 11th looks to be the next resistance level for March Corn, with support found at the September 28th low of 708.75. Mike Zarembski, Senior Commodity AnalystEditorial Disclosure: Any personal views and opinions expressed by the author in this article are the author's own and do not necessarily reflect the viewpoint of GET.com. The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the companies mentioned, and have not been reviewed, approved or otherwise endorsed by any of these entities.