March Corn closed 3 cents lower ($3.74 ¼), July 4 ¼ cents lower ($3.75) & Dec 5 ¼ cents lower ($3.76 ¼)
April Chgo Ethanol closed $0.031 cents a gallon lower ($1.210), May $0.031 lower ($1.231)
Weekly Corn Export Inspections – 829.8 K T. vs. 800 K – 1.100 M T. expected
It was an ugly start to this week’s corn trading as it and other Ag markets responded to the dramatic declines in the equity and energy markets. By mid-morning support was being realized in the old crop against the contract lows made on the 28th of February. Some export interest has been noted due to the combination of the break in the flat price as well as the sharp break in the US Dollar. Tomorrow the USDA will update both US and World corn supply-demand. Based on traders’ polls not much change from the previous month is expected. The US corn carryout is expected to decline by just 4 million bu. and the World carryout is expected to increase by 410 K T. I have to think the trade will give just a passing glance at this data as focus will continue to be on the equity and energy markets.
Interior corn basis levels are showing signs of easing. Both the processor and river locations have selected locations easing. Ethanol processing margins continue under pressure and exports are not real special as evidenced by today’s inspections as they favored the low side of the expected range. The Gulf appears to be easing as well. Despite the idea of basis easing bull spreads were working on Monday within the old crop and old crop was gaining on the new crop. What cash corn we saw move on last week’s mid-week rally has been shut down with the two-day sell-off. Bull spreads work due to the lack of producer selling as well as the lack of quality corn.
Given what’s happening with the outside markets (equities & energies) it was not a disastrous day for the old crop corn market as it finished in the top half of the day’s trading range. I cannot say the same for the new crop as it was only 2 cents off of its lows while the old crop ran 5-6 cents off of the day’s lows. I’m not sure the corn market is going anywhere of substance on the upside as demand is less than market making. The macro-economic markets, equities & energies, should continue to hold sway for the near term.
Daily Support & Resistance – 3/10
July Corn – $3.71 – $3.81
Dec Corn – $3.72 – $3.81
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.