July Corn closed 7 cents higher ($3.27 ½), Sept 6 ½ cents higher ($3.31 ¾) & Dec 5 ¾ cents higher ($3.40 ¼)
June Chgo Ethanol closed $0.033 cents per gallon lower ($1.117), July $0.002 cents higher ($1.116)
Weekly Ethanol Grind as of May 22nd – 724 K bpd vs. 663 K week ago – Stocks – 23.2 M bbls vs. 23.6 M week ago
A continuing rebound in ethanol production coupled with the continuing sell off in the US Dollar had the spec shorts in the corn market running for cover. At one point during the rally July corn was up as much as 10 ¼ cents and Dec up as much as 8 cents. Minor profit taking/hedging had prices easing slightly into the close.
With the recent revival in corn processing for ethanol basis levels to those locations are firming. River locations on the Mid-Miss continue to show a firm undertone with their basis levels. The Gulf market for corn looks quiet. Corn spreads firmed with today’s rally mostly fueled from the spec short covering.
For what seems like a long time I’ve been touting July corn as a trading range from $3.10 to $3.30. The topside of that range was tested today. Dec corn also challenged some trading range resistance ($3.43) today. The question now is can we muster any follow through. We have enough spec shorts to accomplish that but what will the impetus be. Crop conditions I think are rather good and I don’t see any threatening weather at this time. After today’s performance the technical look suggests July corn can trade up into the mid-$3.30’s if not something closer to $3.40.
Daily Support & Resistance – 5/28
July Corn: $3.23 ½ – $3.32 ½
Dec Corn $3.36 – $3.45
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.