March Corn closed 6 cents lower ($3.64 ½), July 6 ¼ cents lower ($3.72 ½) & Dec 4 cents lower ($3.77 ½)
March Chgo Ethanol closed $0.024 cents per gallon lower ($1.254), April $0.029 cents lower ($1.271)
Weekly Corn Export Sales – 864.6 K T. old crop vs. 800 K – 1.300 M T. expected – 113.6 K T. new crop vs. none expected
Flat price corn registers new contract lows across the Board, both old crop and new crop (new contract low closes as well). Weekly export sales were deemed disappointing based on expectations. Continued fears of a global trade slowdown due to the ongoing coronavirus fears added to the onslaught. 1st Notice Day fears kept the spreads under pressure. Argentina talks about a good looking corn crop. Also from Argentina the idea is that the producer down there will sell his new crop corn and hold on to his new crop soybeans due to the anticipated hikes in the soy export duties. Last but not least is the ethanol market; it continues to move lower. Margins are bad enough already so in an effort to keep them getting any worse the price of corn has to go lower as well.
The interior corn basis continues to hold strong. Decatur, IL bumps their basis 5 cents higher, Cedar Rapids 2 cents higher. Council Bluffs rolled to a May basis; now 9 cents under the May from 5 cents under the March. The Gulf basis, as far as I’m concerned, remains a non-event as it holds within a couple of cents of levels dating back to the beginning of the month. Bear spreads continue to be a feature May forward. The March/May was under pressure for most of the day but buying was noted late finishing with a half cent improvement. What about deliveries? Personally I don’t think there will be any but if they are I would suspect they would be #3 yellow. I hear stories across the Midwest that quality corn is deserving of a premium. I continue to hear of potential importers shying away from US corn due to quality concerns.
So – has the corn market gone low enough yet? The price action would suggest not yet. A lack of deliveries in the morning could possibly lend some support. Short term technical indicators suggest oversold while daily technical indicators suggest no. What it comes down to is how short the spec trade is willing to get. Tomorrow is the last day for setting insurance prices. The last time I looked they will be 10 cents lower vs. one year ago. I’m not an advocate of selling in the hole but as long as the investing public remains fearful of the virus impacting global trade the selling should continue.
Daily Support & Resistance – 2/28
May Corn – $3.62 – $3.73
July Corn – $3.67 – $3.78
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.