May Corn closed 2 ¼ cents higher ($3.13), July 1 ½ cents higher ($3.17) & Dec ¼ cent higher ($3.34 ¼)
May Chgo Ethanol closed unchanged ($1.014), June $0.037 cents higher ($1.047)
USDA announces 109.1 K T. of corn sold to Mexico (45.2 K T. old crop, 63.9 K T. new crop)
Not much of a flat price trade on Tuesday; just a 4 ½ cent range in July corn and a 3 ½ cent range in Dec. If there was a feature to today’s trade it was bull spreading led by the soon to expire May contract. The majority of the spreading seemed to be buying old crop selling the new crop. Most river basis locations read higher. Are exporters getting ready for a better export program going forward in reaction to the idea that Brazil’s second season corn crop is shrinking? Next Monday the USDA will update old crop supply-demand. It is my idea the old crop carryout will increase due to the ongoing ethanol problems. The first look at the new crop carryout should be higher as well given the increase in acres as well as the larger carry-in.
Corn charts have moved into a consolidation phase as the trade waits for Monday’s USDA data. Given the magnitude of the large short spec position it is not unreasonable to think we may see some short covering ahead of this data even though bullish data is not expected (just my opinion). Prior to Monday’s data July corn could trade in a range from $3.10 on the downside to $3.25 on the upside.
Daily Support & Resistance – 5/06
July Corn $3.12 – $3.22
Dec Corn $3.29 – $3.39
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