Corn Commentary


Corn – Just My Opinion

July Corn closed 9 ¾ cents higher ($3.48 ¼), Sept 9 cents higher ($3.50 ½) & Dec 10 cents higher ($3.60 ½)

July Chgo Ethanol closed 0.009 cents a gallon higher ($1.209), August $0.045 cents higher ($1.250)

Weekly Ethanol Grind Week of June 26th – 900 K bpd vs. 893 K week ago – Stocks – 20.2 million bbls vs. 21.0 million week ago

Weekly Corn Export Sales – old crop vs. 450-700 K T. expected – new crop vs. 0-200 K T. expected

The speculative shorts continue to head for the door. Granted  the acreage report was a bullish shocker but now we have a weather issue – hot & dry for a good part of the Corn Belt for the first half of this month. So the question becomes how will this forecasted weather impact yields as we move into pollination. With that said I have to think the spec shorts will continue to cover. In the past three days they have bought 100 K or so contracts. Without a reduction in yield and the new acres we would still have a decent sized crop and projected carryover. In all my years weather markets are always the most vicious. They race higher with barely a chance to get in and when its over they fold like a house of cards.

Cash markets are on the defensive as the rally has brought out some old crop cash movement.  The gulf is mostly steady within a few cents of its recent highs. Illinois River closures will slow the rate of soybeans moving to the Gulf. The Sept/Dec spread is on the defensive while Dec is gaining on its deferred. The spec buying is all concentrated in the Dec and March.

Is the Dec corn chart going to become a rocket ship? There’s a bit of technical resistance at $3.70 followed by the 200-day moving average at $3.76 or so. After that its $3.90.

Daily Support & Resistance – 7/02

Sept Corn: $3.44 – $3.60 ($3.70)  

Dec Corn $3.54- $3.70 ($3.80)

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.