Dec Corn closed 3 cents lower ($3.78 ¾), March 4 cents lower ($3.87 ¾) & July 4 cents lower ($4.00 ¾)
December Chgo Ethanol closed 0.0021 cents a gallon lower ($1.373) & Jan $0.016 cents lower ($1.372)
Weekly Ethanol Grind – 1.014 Million bpd vs. 1.004 million bpd previous week – Stocks – 21.9 million bbls vs. 21.1 million bbls previous week
Weekly Corn Export Sales – old crop vs. 300-650 K T. expected – new crop vs. none expected
Considering the trade is expecting to see production drop by 136 million bu. and the US carryout to decline by 112 million bu. the recent price action is contradicting these ideas. Prices are currently challenging the low side of the suggested trading range; the mid-high $3.70’s vs. the mid-high $3.90’s (Dec). Poor export demand is cited as one of the primary reasons for the poor price performance as well as what looks like clear sailing for the balance of harvest. Over the past couple of days S. Korea, normally a consistent US customer, has opted for Black Sea origin.
Using the Mississippi River as a dividing line it looks like west of the river corn basis levels are easing while east of the river basis levels are staying steady to firm. The Gulf stays firm. No one is reporting any major movement. The Dec/March corn spread tightens on this lack of movement as well as the cancellation of previously registered CBOT delivery receipts. The “however” is that the March forward spreads run steady to wider.
For the past there weeks the idea has been that flat price corn is no worse, no better, than a trading affair between the mid-high $3.70’s on the downside and the mid-high $3.90’s on the top side (Dec). Well here we are on the downside of the trading range idea. Not much is expected for weekly export sales in the morning. I will be surprised if the market goes into the USDA report on Friday with such a depressed look.
Daily Support & Resistance for 11/07
Dec Corn: $3.75 – $3.83
March Corn: $3.84 – $3.92
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.