Corn Commentary


Corn – Just My Opinion

May Corn closed 7 cents higher ($3.11 ½), July 5 ½ cents higher ($3.20) & Dec 3 ¾ cents higher ($3.37 ¼)

May Chgo Ethanol closed $0.044 cents a gallon higher ($1.019), June $0.022 cents lower ($1.009)

Weekly Corn Export Sales – 1.356 M T. old crop vs. 700 K – 1.200 M T. expected – 339.0 K T. new crop vs. 200-450 K T. expected

It would be really easy to say today’s rally in the corn market was just month end short covering. I think there was more to it. Word out of China is that are issuing more reduced tariff waivers supposedly for 1.5 M T. Weekly export sales come in better than expected. Additionally I think we saw some technical buying based on prices advancing through yesterday’s highs not just month end position squaring. Deliveries against the May contract, just 223, were deemed as friendly especially towards the nearby spreads.

Interior river locations continue to show a relatively firm basis. The more efficient processors too stand in with relatively firm basis levels. One would think basis levels would be somewhat sloppy given some of the demand destruction we have seen but a good portion of this is offset by the lack of producer selling. The midday Gulf posting is the best I’ve seen since mid-month. Corn spreads showed a noticeable bullish bias out to the new crop. The spreads for the 2020/21 crop year also showed a slightly bullish bias. As of this writing my thought on the July forward spreads is that spec short covering is responsible for today’s bullish bias.

If one looks at a corn chart, either old crop or new crop, you will see a bit of a bottoming formation developing.  The particular price action that I’m looking at is Wednesday’s outside day with the higher close. What adds additional interest to this minor reversal is that it was also a challenge of last week’s contract low. If we are indeed looking at a bottom confirmation comes with closes above last week’s highs – July $3.31 and December $3.43. this idea gets negated with closes below today’s lows.

Daily Support & Resistance 5/01

July Corn $3.15 – $3.25

Dec Corn $3.32 – $3.41

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