March Corn closed 2 ¼ cents lower ($3.84 ¼), July 2 ¾ cents lower ($3.94 ½) & Dec 2 ¼ cents lower ($3.95 ¼)
February Chgo Ethanol closed $0.025 cents a gallon higher ($1.339), March $0.015 cents higher ($1.362)
Weekly Ethanol Grind – 1.029 million bpd vs. 1.049 million bpd previous week – Stocks – 24.2 million bbls vs. 24.0 million bbls previous week
Weekly Corn Export Sales – old crop vs. 600 K – 1.200 M T. expected – new crop vs. 30-100 K T. expected
Last Thursday March corn gave us its best price and close dating back to early November; just 2 days later we were nearly 17 cents below that level. Sure, we can blame it on the coronavirus that has everyone questioning global commerce. The bottom line to all of this from a technical point of view is that we are locked into a trading range affair and the corn market is going nowhere fast. Yes, the US export market is indeed improving but this is just happening with the “usual” customer base (S. Korea, Mexico). It does seem that the exportable corn availability from SA is winding down as their prices are moving higher leaving the US origin as the most attractive. Ukraine, right now, is the only noticeable competition. It is my impression that the trade has just about given up on any new Chinese demand anytime soon.
Interior cash corn markets have taken on the mixed look. The eastern Midwest corn basis continues to be quite strong. As one goes west of the Mississippi River basis it seems is running steady to easier. Despite the recent spate of export business the export market appears to be softening vs. where it was one week ago. Corn spreads, after seeing some flip-flopping the past few days is no worse than steady with a slight looking firm bias. Corn spreads within the current crop year did see some minor firming on the day while the old crop/new crop spreads saw the new crop gaining some ground.
So, how does one handle a trading range market? It’s done by fading the inter-day extremes vs. chasing these extremes. I believe the improving export market will be able to offer support when the market gets ugly for whatever the reason but I doubt it will be enough to take us over the top. With that said leave your attitudes at the door and put your trading shoes on. Tomorrow is export sales day and as of this writing I believe the sales data should be supportive given the number of daily sales announcements we have seen n recent days.
Daily Support & Resistance for Jan 30th
March Corn: $3.81 – $3.91
July Corn: $3.91 – $4.01
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.