May Corn closed 3 ¾ cents higher ($3.47 ¼), July 2 ½ cents higher ($3.52) & Dec 1 cent higher ($3.65 ¼)
April Chgo Ethanol closed $0.014 cents a gallon higher ($0.897), May $0.017 higher ($0.922)
It was turn around Tuesday for the corn market. Futures caught a bid from profit taking on the inter-market spreads where short corn is involved. An announcement from the USDA/USTR suggesting the Chinese trade is starting to swing into action lent some support (I have think they are looking at recent sales and are trying to offer some confidence to the producer). The ethanol situation hasn’t changed as more and more processors are either cutting back on corn purchases or shutting down. There is a lot of talk developing as to whether or not the US corn producer will begin to change his mind on originally thought corn plantings. I’m told that in selected areas of the Midwest that cash prices for new crop are favoring soybeans over corn. The futures’ ratio sits at a high 2.39 -1 so its not quite there.
Cash corn movement remains minimal at best. Demand is such that not much is needed. The interior corn basis has a mixed look to it. The Ohio River is 2 cents better, Lincoln, NE is 7 cents lower, Cedar Rapids 2 cents lower, Savanna, IL 2 cents better and Council Bluffs 4 cents lower. Other locations are running unchanged but with a depressed look. The midday posting at the Gulf has bids jumping 4 cents and offers rising 2 cents. My thought this is due to a lack of cash movement. Corn spreads followed the Gulf’s cue as bull spreads were working. Just how much of this is related to flat price short covering remains to be seen.
After today’s action corn charts are trying to suggest they have gone low enough for the time being. Rally potential, however, remains somewhat limited. July corn runs into initial resistance at $3.60 and if things get interesting something closer to $3.70. Dec corn runs into problems (resistance) in the mid to high $3.70’s.
Daily Support & Resistance – 3/25
July Corn – $3.47 ½ – $3.59
Dec Corn – $3.62 – $3.70
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.