July Corn closed 3 cents higher ($3.51 ¼), Sept 2 ½ cents higher ($3.48 ¾) & Dec 2 ¾ cents higher ($3.57)
August Chgo Ethanol closed $0.035 cents a gallon higher ($1.395), Sept $0.035 cents higher ($1.385)
Weekly Corn Export Sales – 599.3 K T. old crop vs. 300-600 K T. – 409.4 K T. new crop vs. 150-500 K T. expected
Flat price corn was strong in the Wednesday night session and into the early part of the day session. The balance of the day session was spent backing and filling part of that rally. If I didn’t know better the trade was watching the rain during the morning moving across the northern half of Iowa and southern half of Minnesota. Weekly corn export sales were solid – thank you China. Over the past couple of months China has sold nearly 28.0 M T. of corn out of their reserves. The question now is who are they going to go to for the replacement. Tomorrow the USDA will update supply-demand using the new acres and the quarterly stocks figure. The old crop carryout is expected to increase from the stocks figure while production will come down in the new crop due to the updated acreage figure. New crop carryout will come down noticeably but it still will be a comfortable figure. I don’t think the USDA will fool with the yield on this report. Before and after this report the focus will be all about the weather. The rain we saw moving through Iowa today is expected to traverse east over the next few days with some moderating temps. By the middle of next week temps will heat up again; some suggesting warmer than what we saw this week. What rain comes along is still questionable. On a side note – corn open interest has been moving lower since the rally started suggesting all we are seeing is short covering. What will it take to get open interest to start moving higher? How about record heat through the month of July?
Chart talk – flat price corn challenges last week’s highs and backs away. It’s not a rejection but it does suggest we need to know more about the developing crop. Weather going forward will dictate whether we follow through to the upside or fail. I have to think failure would occur with closes below yesterday’s lows. Closes above last week’s highs should attract additional short covering and maybe some new buying.
Daily Support & Resistance – 7/10
Sept Corn: $3.41 – $3.55 (?)
Dec Corn $3.50 – $3.63 (?)
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