March Corn closed 5 cents lower ($3.69 ¾), July 4 ½ cents lower ($3.86) & Dec 2 ½ cents lower ($3.96 ¾)
March Chgo Ethanol closed $0.015 cents a gallon lower ($1.314) & April $0.010 cents lower ($1.329)
Weekly Corn Export Inspections – 941.8 K T. vs. 800 K – 1.050 M T. expected – Year-to-Date – 24.170 M T. vs. 16.680 M T. year ago
It was an ugly day for the feedgrain sector led by the US wheat market. Corn futures moved down to a level not seen since late November. It seems that the wishing and hoping for some Chinese business has left the building. Today’s word around possible Chinese business talked about DDG’s and ethanol; no word of any corn business. What corn business I am hearing about is Brazil buying Argentine corn and China inking a deal to buy Uruguayan corn. Trade meetings with China are ongoing; this time in Washington. Low level delegates are meeting the first half of this week, higher level delegates later this week. On Friday the USDA will play catch-up with weekly export sales to get us current. One would think we should see a pretty large number if we are to believe the USDA and its current estimate of export sales; 2.450 billion bu. or 62.23 M T.
Interior cash corn markets continue to show a firming bias with the processor sector leading the way higher. River bids are rebounding from early last week’s weakness. The Gulf remains strong as well. I’m told most of the strength is due to shipping problems not an imbalance of demand. Corn spreads leak wider all the way through the new crop. The July/Dec spread at a 10 ¾ cent carry is the widest it has been dating back to late September.
Needless to say the lowest close dating back to late November does not give any bullishly inclined traders warm and fuzzies. Failure to hold the late November interim low, $3.67 ¼ (March), would suggest a challenge of the $3.60 level. This Thursday/Friday the USDA will host its annual outlook meeting. At this meeting they will talk about their expectations for the 2019/20 supply-demand. The extended years of supply-demand, normally seen at this meeting, won’t be released until March 13th. In November the OCE released an early look at some of the 2019/20 data; 92.0 million planted acres, yield 176.5 bpa and a carryout projection of 1.603 billion bu. The carryout projection should be massaged a bit as the carryin they used is currently about 80 million bu. less. I may be off base with this idea but I find it a bit unlikely the corn market continues to crash and burn into this meeting (just my opinion).
Daily Support & Resistance for 02/20
Mch Corn: $3.67 – $3.73 July Corn: $3.83 – $3.89
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.