March Corn closed 2 cents lower ($3.70 ½), July 1 ¼ cents lower ($3.78 ¾) & Dec ¾ cent lower ($3.81 ½)
March Chgo Ethanol closed $0.012 cents per gallon lower ($1.278), April $0.016 cents lower ($1.300)
USDA announces 123.0 K T. of optional origin corn sold to S. Korea
Weekly Ethanol Grind – 1.054 million bpd vs. 1.040 million bpd week ago – Stocks – 24.7 million bbls vs. 24.8 million bbls week ago
Weekly Corn Export Sales – 800 K – 1.300 M T. old crop expected – no new crop expected
It was very choppy two-sided trade for the corn market on Wednesday. The highs of the day were made mid-morning when it was announced Argentina was no longer issuing export licenses. This is considered a precursor to raising export duties. Earlier this week it was thought they would do so for soybeans and soybean products while leaving the export duty on corn unchanged at 12%. The lows of the day came relatively late in the session which I believe was part of the 1st Notice Day liquidation (the delivery period against the March contract starts start Friday). May corn did register a new contract low along with a new contract low close. We did see a stout looking grind for ethanol but once again the margins their do leave a lot to be desired as the price of ethanol continues to ratchet lower.
The interior corn basis continues to show a relatively firm undertone mostly from a lack of movement as well as a lack of quality corn. It is an interesting scenario with the Gulf basis – bids are easing while offers are firming. The nearby corn spread runs unchanged on the day but as one moves forward the spreads were under pressure. As I mentioned deliveries start Friday against the March contract. As of this writing there are only 35 contracts currently registered. Yes, that can change but I have to think if we do see an increase in registrations it will be #3 corn as quality corn is tough to come by.
Just My Opinion – the recent price performance leaves a lot to be desired. As of this writing I see nothing to hang my hat on as far as this market trying to sustain a rally. Eventually the spec trade will get too short and we will some sort of spring rally begin. At what level and time frame that starts remains to be seen.
Daily Support & Resistance – 2/27
May Corn – $3.70 – $3.79
July Corn – $3.74 – $3.83
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.