May Corn closed 4 ¼ cents higher ($3.16), July 3 ¾ cents higher ($3.18) & Dec 2 ¾ cents higher ($3.34)
June Chgo Ethanol closed $0.026 cents per gallon higher ($1.081), July $0.026 cents higher ($1.094)
Weekly Corn Export Sales – 774.6 K T. old crop vs. 600 k – 1.100 M T. expected – 97.5 K T. new crop vs. 100-400 K T. expected
USDA announces 686 K T. of corn sold to China (371 K T. old crop, 315 K T. new crop)
Modest flat price short covering along with continued bull spreading is the day’s feature in the corn futures market. Weekly export sales were deemed no big deal but announced corn sales to China offsets. Possible frost/freeze damage this coming weekend also lent support. I will note that as of this writing temps for the weekend don’t appear to be quite as cold as what was being tossed around a couple of days ago. The USDA report scheduled for next Tuesday provided some resistance as the expected data for both old crop and new crop should act as a reminder of more than ample corn stocks. Short covering ahead of the possible weekend weather event as well ahead of the USDA next week should not be unexpected given the size of the spec’s net short position.
The tone of the interior cash corn market (basis) continues to be firm. Producer selling remains minimal. We’ve seen a very slight pickup in the ethanol market as well as in the export market. I’ll call the Gulf market fully steady.
Spinning wheels go round and round as the corn market consolidates just above recent contract lows. The spec trade is a big time short but I’m not sure what’s out there to prompt him to do some extensive covering. For the time being I’ll say July is trapped between $3.10 and $3.25. Dec corn is not much better as it appears range bound for the near term between $3.25 and $3.40
Daily Support & Resistance – 5/08
July Corn $3.14 – $3.24
Dec Corn $3.30 – $3.39
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.