Dec Corn closed 8 ¾ cents higher ($3.95 ¾), March 7 ½ cents higher ($4.06 ½) & July 6 ¼ cents higher ($4.14 ½)
November Chgo Ethanol closed $0.046 cents a gallon higher ($1.442) & Dec $0.035 cents higher ($1.419)
Despite a lethargic looking Monday night trade the Tuesday day session brought us prices roaring higher. The news for the Monday night trade was not anything different for the Tuesday day session; lagging maturity ratings, a season ending hard frost/freeze/snowstorm for a good part of the northwestern reaches of the Corn Belt, a potential hike in ethanol production for 2020 and the anticipation for a bullishly construed production supply-demand report on Thursday. Why the corn market failed to react to all of this Monday night is beyond me (maybe it’s the lack of liquidity during the night session). The bottomline is that Tuesday’s rally brought us new highs for the rally that started on Sept 12th. It will be interesting to see how the forecasted end to the growing season impacts the corn crop. Will there be lost bushels or will it create damage if not both? Lost bushels are a flat price play while poor quality corn is a spread play. For what it is worth the Dec/March spread started the day at a 12 cent carry and quickly narrowed in to a 10 ½ cent carry. The combination of higher prices and a tighter spread suggests we the absolute definition of a bull market.
The interior corn basis shows us mixed readings on Tuesday. Burns Harbor (Chgo) is 4 cents better, Savana, IL is 1 cent better and Council Bluffs is 1 cent easier. The Gulf’s midday posting shows bids down 6 cents and offers off 1 cent. One would think the Gulf’s lower midday posting is in response to not only slow export demand but also the possibility of a pick-up in movement given today’s flat price rally. Spreads were strong due to the upfront flat price buying not only within the current crop year but even more so with the year to year spreads.
The recent downflagging formation, prior to today’s rally, measures to $4.01 ¾ (Dec). Given the call for an end to the growing season late this week and into early next week for a good portion of the northwest Corn Belt and the anticipation of bullish corn report on Thursday prices should remain firm right up to report time. Any back off in prices between now and Thursday’s report should be limited to the mid-high $3.80’s (Dec).
Daily Support & Resistance for 10/09
Dec Corn: $3.92 – $4.02
March Corn: $4.03 – $4.13
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