Corn Commentary


Corn – Just My Opinion

July Corn closed 1 ½ cents higher ($3.20 ½), Sept 1 ¼ cents higher ($3.25 ¼) & Dec ½ cent higher ($3.34 ½)

June Chgo Ethanol closed $0.015 cents per gallon lower ($1.150), July $0.015 cents lower ($1.114)

Not much of a corn trade today, not even a 3 cent range. We did see some short covering in the old crop due to ideas that the ethanol business may start recovering to the point it may become a market maker. The other side of that coin is that US biofuel sources are warning that the primary legislation underpinning the country’s entire biofuel use could “implode” if the government agencies that oversee the scheme allow oil refiners to apply for retrospective biofuel waivers. Not much is happening with the export market but there are hopes it could improve due to slow farmer selling in Argentina and what appears to be a smaller 2nd season crop coming out of Brazil. Weather forecasts going forward suggest a good start to the corn growing season. There is talk we’ll lose acres especially in N. Dakota but it’s my opinion we can afford to lose some acres especially if Mother Nature is kind to the US corn producer.

It’s the mid-Miss river locations that are seeing higher advertised basis levels. Remember that a good portion of the Illinois River is slated to shut down due to lock and dam repair beginning sometime in early June. Not much is happening with the export basis. Modest spec short covering in the old crop firmed the spreads, especially old crop to new crop.

Overall corn charts continue to advertise trading range affairs. The broader range of July corn is roughly $3.10 to $3.30 with a tighter range within the range $3.14 to $3.25. Dec corn has a similar set-up. The broader range is $3.25 to $3.48 with a tighter range within the range $3.30 to $3.43. What takes us out of these trading range affairs remains to be seen.

Daily Support & Resistance – 5/28

July Corn: $3.16 – $3.24

Dec Corn $3.31 – $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.