Corn Commentary


Corn – Just My Opinion

Dec corn closed 2 ½ cents lower ($3.63 ¼), March 1 ¼ cents higher ($3.77) & July 2 cents higher ($3.88)

January Chgo ethanol closed $0.025 cents a gallon lower ($1.338), Feb $0.025 cents lower ($1.358)

CONAB – Brazil Corn Production – 26.313 M T. (1st season) + 70.936 M T. (2nd season) = 98.409 M T. vs. 100.046 M T. year ago

Highlights USDA Corn Supply-Demand Report – All domestic data left unchanged – World carryout increases by 4.6 M T. – Take China out of the mix and World carryout declines 1.17 M T.

Nobody was really expecting to see any changes of note on the US corn supply-demand and that’s what they got. The World supply-demand was a bit deceiving as with China the carryout increased 4.6 M T. but without China the carryout decreased 1.17 M T. When was the last time China was a significant corn buyer? Today’s China numbers suggest not any time soon. Now that we have this report out of the way the trade will begin to focus on the January crop production report and you can be sure there will be all sorts of talk around harvested acreage reductions as well as yield reductions. In addition, many will be expecting see improvements in export as the SA corn export program winds down.

With one exception (Davenport, IA) all interior corn basis locations read steady if not higher on Tuesday. The Gulf basis continues to edge back higher after last week’s easing. Corn spreads within the current crop year eased fractionally while the old crop/new crop spreads ran steady to fractionally better.

Flat price corn continues with its recent minor consolidation phase as old crop prices sit on top of suspected support; $3.75 to $3.70 March futures. To say an interim low has been established I need to see March corn close above the mid-$3.80’s. The spec is the primary short while the producer is the primary long. I get the impression that if the corn market is to work appreciably lower it needs to rally first.

Daily Support & Resistance for Dec 11th

March Corn: $3.73 ½ – $3.82

July Corn: $3.84 ½ – $3.93

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.