March Corn closed 3 ¾ cents higher ($3.89 ½), July 3 ¼ cents higher ($4.02 ¾) & Dec 2 cents higher ($4.04 ¾)
February Chgo ethanol closed $0.018 cents a gallon higher ($1.362), March $0.018 cents higher ($1.382)
USDA announces 137.0 K T. of optional origin corn sold to S. Korea
Weekly Corn Export Inspections – 460.3 K T. vs. 450-650 K T. expected
Flat price picks up where it left off on Friday with short covering. The short covering not only involved the flat price but with the inter-market spreads as well. Prior to Friday the trade had been developing long soybeans vs. short corn and long wheat vs. short corn. Despite the production data from the USDA not coming in as low as the trade had been suggesting the Quarterly Stocks data, lower than expected, was enough to prompt the short covering. I’m not sure the flat price of corn is going anywhere of substance but the trade was just a bit too short given the noticeable hike in feed demand (that far outweighed the cut in exports). Just my opinion; it was about time the USDA recognized the growing animal numbers. We have seen months’ worth of data suggesting higher livestock numbers yet this was the first time the USDA recognized it on their supply-demand reports in the past tow months. The next noticeable news item the trade will be looking for will be details from the US-China trade accord which is scheduled for official signing on the 15th (or shortly thereafter).
The interior cash corn market (basis) continues to have a firm undertone. The midday posting for the Gulf basis saw bids easing while offers firmed. Recent weekend weather has created some new havoc with barges moving down to the Gulf. Corn spreads were firmer within the crop year and old crop was a noticeable gainer on the new crop.
The last day and a half of price action is suggesting we’ve gone low enough for the near term. I do question, however, just how much higher the flat price can go. I still think the mid-$3.90’s represents formidable resistance for March corn. As of this writing my idea of where we go from here is “sideways” unless exports pick up dramatically or problems develop with Brazil’s 2nd season corn crop. Weekly charts are suggesting, for now, $3.75 to $4.00.
Daily Support & Resistance for Jan 14th
March Corn: $3.86 – $3.91
July Corn: $3.99 – $4.04
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