Corn Commentary


Corn – Just My Opinion

July Corn closed 3 ½ cents higher ($3.29 ¾), Sept 3 ¼ cents higher ($3.35) & Dec 2 ¼ cents higher ($3.43 ¾)

July Chgo Ethanol closed $0.048 cents a gallon lower ($1.192), August $0.048 lower ($1.152)

Weekly Corn Export Sales – 660.7 K T. old crop vs. 500-800 K T. expected – 26.0 K T. new crop vs. 0-300 K T. expected

Highlights of June Corn Supply-Demand – US Old Crop – Lowered production by 46 million bu., lowered ethanol usage by 50 million bu., increased carryout by 5 million bu. – US New Crop – increased carryin by 5 million bu., increased carryout by 5 million bu. – World Old Crop – lowered carryout by 1.82 M T. – World New Crop – lowered carryout by 1.75 M T.

US carryout changes come in lower than expected. Net changes were minimal vs. the May data; up 5 million bu. Since most of our USDA reports reactions are based on expectations short covering ensued shortly after the data was released. On the surface the numbers themselves were nothing to write home about but since the corn market specs are heavily short explains the lack of downside follow through. Adding to the short covering is the idea that at the end of the month the USDA will report lower planted corn acres (N. Dakota). After recent rains across the Midwest the latest forecasts are suggesting at some warm and dry conditions developing for the 6-10 day while more normal conditions for the 8-14 day per the latest from the NWS. In other words the A/B (above normal temps/below normal moisture) in the 6-10 day is not forecasted to last.

As I mentioned yesterday the recent weakness (basis) along the interior river locations has stabilized. The gulf Corn basis shows a steady bid and slightly higher offers. Bull spreads caught a spark, caught against the new crop, with today’s short covering. For what it is worth today was the last day of the “big boy” index fund rolling.

Today’s price activity has not changed the technical look of the corn charts. Both old crop and new crop continue to trade in a sideways to higher channel. It will be interesting to see how much press the forecast for the near term A/B gets and how much more short covering it prompts.

Daily Support & Resistance – 6/12

July Corn: $3.26 – $3.35

Dec Corn $3.40 – $3.49

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.