Corn Commentary


Corn – Just My Opinion

March Corn closed 5 cents higher ($3.93 ¾), July 4 cents higher ($4.03 ¼) & Dec 2 ½ cents higher ($4.03 ¼)

February Chgo ethanol closed $0.011 cents a gallon higher ($1.336), March $0.011 cents higher ($1.356)

USDA announces 143.9 K T. of corn sold to Guatemala (114.2 K T. old crop – 29.7 K T. new crop) – 141.0 K T. of corn sold to Unknown

Weekly Ethanol Grind – 1.049 million bpd vs. 1.095 million week ago – Stocks – 24.0 million bbls vs. 23.0 million week ago

Weekly Corn Export Sales – old crop vs. 500-950 K T. expected – new crop vs. 200-250 K T. expected

March corn registers its best price dating back to November 5th. Strong cash markets (both interior and export), what looks like an improving export market and up until now relatively slow producer selling all work together for what appears to be an interim breakout to the upside. The recent competition from Brazil is definitely winding down. New crop from Argentina won’t be available until late March. The only real export competition left is Ukraine. I continue to hear a lot of talk about the poor quality of this year’s US corn crop which in turn has turned some potential buyers elsewhere.

Needless to say cash markets for corn, both interior and export, are strong. Prior to today producer selling has not been much to write home about. It will be interesting to see if today’s rally has sparked some new selling or if it just firmed the producers’ resolve that prices have to go higher. Bull spreads work noticeably on the day; March gains 1 cent on the July and July gains 1 ½ cents on the Dec.

From a technical perspective today’s price performance has to be viewed as friendly going forward. I do have to question what will be behind the ensuing rally. As of this writing I have to think it will be short covering from the spec/managed sector. Because I think the ensuing rally will be based on short covering not necessarily new buying longs whatever rally ensues will be done in a grinding type manner as I see lots of technical resistance from $3.95 up to $4.05.

Daily Support & Resistance for Jan 24th    

March Corn: $3.91 – $3.96 ($3.98 ½)

July Corn: $4.00 ½ – $4.05 ($4.07 ½)    

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