Sept Corn closed 6 ¼ cents higher ($3.54 ½), Dec 7 ¼ cents higher ($3.67 ¼) & March 7 ½ cents higher ($3.79 ¾)
October Chgo Ethanol closed $0.013 cents a gallon higher ($1.346) & Nov $0.013 cents higher ($1.351)
Weekly Corn Export Sales (2019-20) – 498.1 K T. vs. 500-900 K T. expected
USDA announces 113.0 K T. of corn sold to Mexico
Highlights of USDA Corn Report – US Old Crop – Lowered imports by 5 million bu., lowered ethanol usage by 50 million bu., lowered exports by 40 million bu., increased carryout by 85 million bu. – US New Crop – increased carryin by 85 million bu., lowered yield by 1.3 bpa, lowered production by 102 million bu., lowered ethanol usage by 25 million bu., increased carryout by 9 million bu. – World Old Crop – Increased carryout by 85 K T. – World New Crop – Increased carryout by 9 K T.
The initial reaction to the USDA corn report was bearish as prices came close to testing the lows made earlier this week. Prices came marching back in fairly quick order as one of the bylines in the USDA report talked about their latest assumptions being based on “normal” weather for the balance of the growing season. Given the lateness of the crop and some “frost” creeping into the forecast 12 days out for the northern reaches of the Corn Belt (not all forecasters agree with this) created some questions around just how viable is the USDA’s yield projection. Not only is the yield in question but harvested acres as well since very little harvest is happening in the heart of the Corn Belt; the USDA left that number unchanged.
The interior corn basis continues to run with a steady to higher bias. Movement remains minimal. The Gulf is mostly steady as it holds on to its recent modest gains. Weekly export sales were deemed as disappointing as they came in at the low side of expectations. Given today’s flat price performance, the best close in a week and half, will probably work to solidify the producers’ resolve that we will be looking at better prices over the near term. Spreads ran mixed to a shade better out to July 2020. Bull spreading against the 202-21 crop year was quite noticeable.
After today’s activity, an outside day with a noticeably higher close, the price charts are suggesting the worst may be behind us. The test of the contract low followed by a 14 cent rally is as powerful looking as the closing reversal we saw back on May 13th; the day that started the run to the $4.70 level. $3.70 represents the first level of resistance for Dec corn followed by $3.80. I don’t want to get too excited and say we are on our way to fill the gap at $3.92 ¾ (at least not yet).
Daily Support & Resistance for 09/13
Dec Corn: $3.62 – $3.69 ($3.72)
March Corn: $3.74 ½ – $3.82 ($3.85)
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