March corn closed 7 cents higher ($3.88), July 6 ½ cents higher ($4.00 ¼) & Dec 5 cents higher ($4.00 ¼)
January Chgo ethanol closed $0.022 cents a gallon higher ($1.390), Feb $0.022 cents higher ($1.410)
Weekly Corn Export Inspections – 686.6 K T. vs. 400-650 K T. expected
Spec and fund shorts are on the run. It’s a combination of factors behind their short covering; the China trade deal, Argentina hiking export taxes and the idea that the January crop report will feature lower production (lower harvested acres & lower yield). There is also the speculation that US corn exports will soon begin to increase as the Brazilian exportable supply starts to run low as evidenced by last week’s improved sales and today’s better than expected inspections.
The interior corn basis continues to read steady to higher with a firm undertone. The same scenario exists for the Gulf basis. Now that the US producer sees that we have a trade deal with China and ongoing questions around last season’s crop size he is probably thinking he has survived the worst as far as the bear market is concerned. The next question to be answered is if he starts selling and when. Corn spreads within the current crop year saw fractional improvements while old crop was a noticeable gainer on the new crop. The idea there is better demand for the old crop and increased acres for the new crop.
Given the prospect for better demand and the idea of lower production data from the USDA in January spec shorts should continue to cover. The next notable resistance level for March corn is $3.95 to $4.00. After that level we’ll look at the October high against $4.12. If the spec gets really excited, we’ll look at the $4.35 to $4.40 as the next stop. Support now appears to be clear down towards $3.75.
Daily Support & Resistance for Dec 17th
March Corn: $3.81 – $3.94
July Corn: $3.93 – $4.06
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