Corn Commentary


Corn – Just My Opinion

March corn closed 3 cents lower ($3.87), July 2 ¾ cents lower ($3.99 ½) & Dec 2 cents lower ($4.00)

January Chgo ethanol closed $0.012 cents a gallon lower ($1.357), Feb $0.012 cents lower ($1.379)

Weekly Ethanol Grind – 1.064 million bpd vs. 1.072 million bpd previous week – Stocks – 21.8 million bbls vs. 21.8 million bbls previous seek

Weekly Corn Export Sales – old crop vs. 1.200-2.000 M T. expected – new crop vs. 525-700 K T. expected

Flat price corn goes into minor consolidation following the recent 4-day 19-20 cent rally. Today’s consolidation featured minor backing and filling. New news was slight as it seems the trade is waiting for signs of new export buying whether it’s from China or customers switching from Brazilian origin. It is widely anticipated that Brazilian will soon be exhausting its exportable supply of corn. Tomorrow is export sales day and the trade is looking for big numbers as last week the USDA announced in daily reporting nearly 1.200 M T. of old crop corn sold (Mexico 1.074 M T. and unknown 110.7 K T. unknown) and 525.7 K T. of new crop corn sold (Mexico). Just how much over and above these sales are seen should dictate tomorrow’s direction.

The interior corn basis continues to look strong with no real signs of easing (at least not yet). The Gulf continues to be firm as well. The March/May corn spread ran steady on the day while easing/widening was noted vs. the forward contracts. Today’s easing of the spreads was consistent with the minor correction in the flat price.

The recent 4-day rally has prompted some thoughts of a “short-term” overbought scenario. Wednesday’s backing and filling has alleviated that scenario. The daily trade is nowhere near overbought. The most obvious near-term support is the $3.85-$3.84 level as it had been touted as interim resistance prior to the recent rally. The next level of support below must be the Sunday night opening gap higher. That gap will fill at $3.81 ½. The next level of decent looking resistance is still the mid-$3.90’s. To challenge that resistance, I think we will need to see weekly export sales favor the high side of expectations.

Daily Support & Resistance for Dec 19th

March Corn: $3.81 ½ – $3.92

July Corn: $3.94 – $4.05

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