Corn Commentary


Corn – Just My Opinion

Dec Corn closed 4 ½ cents higher ($3.90 ¾), March 3 ½ cents higher ($3.99 ½) & July 1 ¾ cents higher ($4.10 ½)

November Chgo Ethanol closed $0.034 cents a gallon lower ($1.411) & Dec $0.009 cents lower ($1.410)

Weekly Ethanol Grind – 1.004 million bpd vs. 996 K bpd one week ago – Stocks – 21.1 million bbls vs. 21.4 million bbls one week ago

Weekly Corn Export Sales – old crop vs. 300-800 K T. expected – new crop vs. none expected

The corn futures’ market finally recognizes a surging cash market. It’s hard not to notice when the Gulf jumps 9-10 cents in a day. I will remind you that overall demand for US corn is not all that great but there is absolutely nothing moving so what little demand we have becomes magnified. I have to think a good portion of today’s buying is spec/managed money buying as they remain a decent sized short. Winter weather across the Midwest will keep harvesting slow to not at all at least until sometime late next week.

The interior corn basis continues to surge higher at many locations. Leading the charge higher are river locations that feed down to the Gulf. In just 2 days’ time the Gulf is up 9-10 cents. Processors continue to stand in but less inclined to pay up. Needless to say corn spreads continue to tighten as dictated by the cash markets. Dec/March corn traded into a 8 ¼ cent carry; a level not seen since late July, early August.

Yesterday Dec corn made a low at $3.82; today’s high was $3.91 ¼. Are we supposed to get all bulled up over this rally? My thought is we are still a trading range affair between the mid-high $3.70’s and mid-high $3.90’s. Tomorrow is export sales day as well as month end. Recent export sales have been very disappointing. The spec/managed money trade is net short. Will they try and dress up their month end positions? For what it is worth Dec corn did register an interim upside reversal with Tuesday’s trade and today’s trade honored that reversal.

Daily Support & Resistance for 10/31

Dec Corn: $3.86 ½ – $3.95    

March Corn: $3.95 ½ – $4.04

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.