Corn Commentary


Corn – Just My Opinion

Dec Corn closed 4 cents lower ($3.73 ¼), March 4 ½ cents lower ($3.82) & July 4 ¾ cents lower ($3.95)

December Chgo Ethanol closed 0.027 cents a gallon higher ($1.445) & Jan $0.014 cents higher ($1.417)

Weekly Corn Export Inspections – Delayed until Tuesday, Nov 12th

Weekly Corn Crop Progress – Delayed until Tuesday, Nov 12th

On Friday the USDA cut US corn production by 118 million bu.; then they cut demand by 100 million bu. This further frustrates those trying to be bullish on supply. US exports now play second fiddle to SA origin. Argentina and Brazil combined are expected to export 69.5 M T. of corn vs. the US at just below 47.0 M T. Ukraine is expected to export 30.0 M T. of corn furthering lost US market share of exports. The bottom line here is that a short crop is that much larger with lost disappearance. As we move forward those still wanting to be friendly based on the idea of further production cuts in January my question to them is “what do we do for the next 2 months?” Given the fact that the spec/managed participants are already noticeably net short I would like to think the idea of a trading range affair lives on but at slightly lower levels from the original idea of the mid-high $3.70’s to the mid-high $3.90’s. For the next 6-8 weeks the daily focus will be on demand (does the US continue to lose export market share?) and the growing conditions of the SA crop.

The overall trend in the interior cash corn markets continues to show a firm bias despite some selected easing from time to time. The Gulf corn market continues to show a firm tone as it grinds higher (with emphasis on the word “grind”). Corn spreads ran fractionally improved within the current crop year. Old crop, however, continues to lose to the new crop.

The neckline of the proposed bottom that was completed in September comes in around $3.72 -$3.71 (on a closing basis – Dec). Technical considerations suggest caution at selling current level. Unfortunately the price action does not suggest ownership. To steady this market we need to see closes above the knee-jerk highs we saw on Friday; $3.83 ¾ Dec and $3.92 ¼ March.

Daily Support & Resistance for 11/12

Dec Corn: $3.71 (?) – $3.78     

March Corn: $3.80 (?) – $3.87

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.