March Corn closed 2 ¼ cents lower ($3.52 ½), July 2 cents lower ($3.71 ½) & Dec 2 cents lower ($3.86 ½)
April Chgo Ethanol Closed $0.006 cents a gallon lower ($1.293) & May $0.005 cents lower ($1.307)
Weekly Corn Export Inspections – 765.6 K T. vs. 800 K – 1.000 M T. expected – Cumulative 26.563 M T. vs. 20.354 M T. year ago – Current USDA target 60.33 M T.
It was another “blue” Monday for grain trading, corn included. May corn registers new contract lows along with new contract low closes. July corn is about 1- 1 ½ cents way from its contract low. Friday’s hike in the projected old crop carryover coupled with today’s feeble looking export projections allows the fund sector to add to existing net short positions. We are three weeks away from the midway point of the current marketing season and exports are 3.8 M T. shy of 50% of projected exports. As we move forward into the spring period US corn exports are biased to lose to SA origination as their respective new crops become more readily available. CONAB will be out in the morning with their latest ideas on the Brazilian corn crop. You can be sure it won’t be a small number; 91.6 M T. last month. With this said it will become more and more difficult to play catch-up with exports. So where could a rally come from? As much as I believe the spec trade is too short the demand side of the equation offers little support. The only remaining factor that could prompt the shorts to cover is weather related issues impacting timely planting. Current forecasts don’t look too conducive to timely planting but it is early.
Interior cash corn markets run steady to better as new cash corn sales are almost nonexistent. Processors continue to show the best basis levels. This is true across the entire Midwest. River locations are running mostly steady. The Gulf is steady with Friday night’s posting. Corn spreads continue to inch wider as spec selling weighs on the front months.
Other than ideas that the spec trade is too short what’s out there to suggest corn prices are down going down? It sure isn’t demand and evidently it is too early for weather considerations. The price action is barely short of ugly; the path of least resistance continues to be lower.
Daily Support & Resistance for 03/12
July Corn: $3.68 (?) – $3.76 Dec Corn: $3.83 (?) – $3.91
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.