Sept Corn closed 1 ¼ cents lower ($3.25), Dec ½ cent lower ($3.34 ½) & March ½ cent lower ($3.45 ½)
August Chgo Ethanol closed unchanged ($1.150), Sept unchanged ($1.150)
Weekly Corn Export Inspections – 797.4 K T. vs. 900 K – 1.200 M T. expected
USDA says US Corn Crop now rated 72% GE (+3%) vs. 69.5% expected vs. 58% year ago – Silking – 82% vs. 75% 5-year average – Dough Stage – 22% vs. 17% 5-year average
The idea is that crop conditions for a good majority of the Corn Belt are in good shape as weather forecasts continue to be non-threatening. The other side of that coin is demand. We know China has sold 36 M T. of old crop out of its reserve – have to think this will get replaced but from whom and in what time frame remains to be seen. The cascading lower US dollar has to help. Premiums for corn out of SA are ratcheting higher suggesting the US is the cheaper origin. Unfortunately when one sees export inspections such as we saw this morning one has to ask where’s the demand. The answer to that is the demand is for the new crop. So here we have the problem – is the crop good enough to handle the demand. Recent price action suggests we have a stand-off. Hopefully the USDA will give us some clarity on this come August 12th.
The interior Midwestern corn basis has a mixed look to it. Processors appear to be reaching for corn while river locations are backing off. Ethanol locations appear to be steady with a firm undertone. The Gulf continues to be firm looking. Corn spreads were a mixed bag as Sept loses to Dec while Dec gains fractionally on the March and May. Where pollination appears to successful one would think the producer would start to let go some of the old crop he has been sitting on.
For the time being Dec corn appears to be a trading affair between $3.30 and the mid-low $3.40’s. My only question is whether or not this scenario lasts until the 12th when we hear from the USDA. Will crop conditions outweigh the potential demand?
Daily Support & Resistance – 7/28
Sept Corn: $3.21 – $3.30
Dec Corn $3.30 – $3.39
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