March Corn closed 5 ¾ cents lower ($3.76 ¼), July 5 ¼ cents lower ($3.92 ¼) & Dec 5 cents lower ($3.99)
February Chgo Ethanol closes 0.011 cents a gallon lower ($1.270) & March 0.012 cents lower ($1.293)
CONAB suggests Brazil corn crop at 91.189 M T. (27.455+63.734) vs. previous estimate of 91.01 M T. (27.367+63.734)
The fundamental news that was available to us today had a bearish slant. CONAB suggested the Brazilian corn crop was slightly higher vs. trader expectations (they were expecting a slightly lower crop size). A well respected consulting agency out of Brazil is suggesting the Brazil corn crop will be 4.4 M T. greater vs. the CONAB estimate. Late yesterday afternoon the Rosario Exchange suggested the Argentine corn crop is 44.0 M T. vs. earlier ideas of 42.0-43.0 M T. Statements from the US trade representatives following this week’s meeting with China said the following “talks also focused on China’s pledge to purchase a substantial amount of US agricultural goods”. The Chinese statement following this meeting mentioned nothing specifically in regards to US agricultural purchases. The absence of a USDA January grain report also weighed on the market as most traders were expecting friendly looking US data.
Interior cash corn markets (basis) if not steady are lower. Most of the lower markets that are being noted are river locations that feed down to the Gulf. The recent trend of the Gulf basis is one of easing as well. The soft cash markets continue to weigh on CBOT corn spreads; the March/July spread traded out to a 16 cent carry which is a new contract low.
Soft looking cash markets plus soft looking spreads lead to a soft looking futures market. Despite the “short term” look the US corn market remains a trading range affair. I will admit the short term look is suggesting the sideways to higher trendline that has been in place since mid-September is in line for a severe test. If March corn takes out the recent low of $3.72 ½ – $3.72 ¾ it should rattle the cage of any recent longs. If this level is taken out we will next look at the gap on the weekly corn charts; $3.66 ¾ to $3.69 ¾.
Daily Support & Resistance for 01/11
Mch Corn: $3.74 – $3.81
July Corn: $3.90 – $3.97
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.