December Corn closed 10 ¼ cents lower ($5.12 ¼), March 10 cents lower ($5.22) & May 9 ½ cents lower ($5.28)
USDA Announces Corn Export Sale – 161.5 K T. to Unknown
Follow through selling from Tuesday’s bearishly construed USDA report dominated the corn trade today. Spreads continue to widen (more carry in the price structure) suggesting full scale liquidation. Yesterday’s improved crop condition report coupled with more than 50% of harvest yet to go suggests more good corn out there will be looking for a home in the coming weeks. Today’s announced export corn sale is step in the right direction but far more export is needed to offset the larger than expected total supply. In yesterday’s report the USDA said total corn supply increased by 72 M bu. while total usage declined by 20 M bu. Bull markets won’t happen with these types of supply-demand swings.
Despite spreads widening interior corn basis levels have stabilized from recent declines and in many areas are trying to sustain improvement. The Gulf, however, remains slack looking.
My technical perspective suggests flat price corn has entered a minor state of short term oversold. $5.00 to $4.97 ½ (the Sept 10th low) is still perceived as support. Near term harvest slowdowns should try and provide us with some bouncing but I can’t imagine there is much on the upside. $5.20-$5.25 now looks like some decent resistance.
Daily Support & Resistance – 10/14
Dec Corn: $5.05 – $5.20
March Corn: $5.15 – $5.30
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