Sept Corn closed 7 ¾ cents higher ($3.48 ½), Dec 7 ¼ cents higher ($3.61 ½) & March 7 ¼ cents higher ($3.74 ½)
October Chgo Ethanol closed $0.021 cents a gallon higher ($1.331) & Nov $0.020 cents higher ($1.336)
USDA announces 278.2 K T. of corn sold to Mexico
Flat price corn gives us one of the better one-day rallies that have been few and far between. This was prompted by the lower than expected crop rating from the USDA Monday afternoon. This and the late maturity of the crop coupled with some renewed China trade talk kept prices firm for the majority of the trading day. Speculative short covering is suspected to be the lion’s share of the day’s buying. The majority of weather forecasts continue to suggest no frost/freeze anytime soon.
Interior corn basis levels have a firm tone pretty much across the board. Processors appear to be reaching for corn as are river locations. The Gulf has been in a minor firming mode as well. Corn spreads were steady upfront and had a slight bullish bias as we forward. As of this writing much of the bull spreading can be attributed to the flat price short covering. Export needs continue to be no great shakes which is fortunate because the crop is so late. Producers appear resolute not to sell anything until they can be sure of what they have.
So – was today’s rally a one-day wonder? In the last week of August we saw a 2-day near 13 cent rally that evaporated faster than it came. It’s understandable to see some position squaring (short covering in this case) ahead of a USDA report (this Thursday). Can the USDA really say anything new on this report given the lateness of the crop? It is thought the old crop carryout/new crop carryin will increase as exports did not come up to USDA projections. Other than that I’m not sure we should expect any other noticeable changes. Ahead of Thursday’s report Dec corn should experience resistance in the mid-high $3.60’s while support is suspected to be in the mid-$3.50’s.
Daily Support & Resistance for 09/11
Dec Corn: $3.57 – $3.65 ($3.69)
March Corn: $3.70 – $3.78 ($3.82)
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