Corn Commentary


Corn – Just My Opinion

Dec corn closed 9 ¼ cents higher ($3.67), March 6 ½ cents higher ($3.77 ¾) & July 6 ¼ cents higher ($3.90)

January Chgo ethanol closed $0.022 cents a gallon higher ($1.344), Feb $0.022 cents higher ($1.364) – Prices were another 3 cents stronger after settlement time.

Weekly Corn Export Sales – 873.6 K T. old crop vs. 400-800 K T. expected – 2.4 K T. new crop vs. none expected

USDA announces 1.600 M T. of corn sold to Mexico – 1.074 M T. old crop, 525.7 K T. new crop

USDA announces 110.7 K T. of corn sold to Unknown

Is today the beginning of the long-awaited US corn export program? Weekly export sales were stout vs. recent weekly export sales. Additionally, the USDA announces through its daily reporting system that Mexico bought 1.600 M T. (1.074 M T. old crop & 525.7 K T. new crop) and 110.7 K T. of corn sold to unknown. This brings Mexico corn sales to 8.3 M T. on the year; almost in line with purchases the same time frame year ago. So far Mexico is the best buyer of US corn as their purchases to date account for about 50% of this year’s corn sales. Adding fuel to the fire were tweets out of Washington suggesting the two sides were “getting very close to a big deal with China”. I think it’s questionable that China would buy much corn from the US given their recent production increase.

The interior river corn basis is starting to waffle a bit as the Ohio River was off 4 cents and Seneca, IL off 4 cents as well. The processor continues to stand in with its strong basis; Cedar Rapids up 2 cents, up 7 cents on the week. The Gulf basis appears to be easing once again. It will be interesting to see if any corn moved with today’s rally. Spreads improved only fractionally within the current crop year. Old crop corn was a 1-2 cent gainer on the new crop.

Where would the US corn export market be without Mexico? Today’s sharp rally negated Wednesday’s sell-off. My thought continues to be we need to see March corn close above the $3.85 level to suggest the worst is behind us at least for the interim. After the close it was announced that the US has reached a trade deal in principle with China; just waiting for the President to sign off on it. The trade will now be anxiously awaiting details on the agreement. If the deal does involve corn the talk will now go back to the subject of lower harvested acres and lower yields on the January crop report.

Daily Support & Resistance for Dec 13th

March Corn: $3.75 – $3.85

July Corn: $3.87 – $3.97

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