May Corn closed 8 ¾ cents lower ($3.35 ¼), July 8 ¼ cents lower ($3.41 ¾) & Dec 4 ¾ cents lower ($3.57 ¾)
April Chgo Ethanol closed $0.076 cents a gallon lower ($0.952), May $0.064 lower ($0.972)
Weekly Ethanol Grind – 1.035 million bpd vs. 1.044 million week ago – Stocks – 24.6 million bbls vs. 24.3 million week ago
Weekly Corn Export Sales – 600 K – 1.200 M T. old crop expected – 50-150 K T. new crop expected
Crude Oil swoons down to $20.00 a barrel and takes ethanol prices down to near $0.94 a gallon. In turn corn prices move lower in an effort to protect processing margins. As margins slip-slide away one has to wonder how long the less efficient processors can stay in business. We have to remember that ethanol usage accounts for nearly one-third of US corn disappearance.
Interior corn basis locations are taking it on the chin today. I track 11 different locations and everyone one of them are reporting lower basis levels. Not to be left out the Gulf basis is down noticeably as well. Needless to say corn spreads continue to move towards additional carry.
In the past couple of years nearby corn futures were able to find support near the $3.30 level. Today we saw the nearby May corn contract trade down to $3.32. In September of 2016 nearby corn futures saw a spike low at $3.01. the bottom line here is that if energy prices continue to swoon corn prices will have to follow.
Daily Support & Resistance – 3/19
July Corn – $3.36 – $3.50
Dec Corn – $3.52 – $3.66
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.