Sept Corn closed ¼ cent higher ($3.15 ¾), Dec ½ cent higher ($3.26 ¾) & March unchanged ($3.38 ¼)
August Chgo Ethanol closed unchanged ($1.170), Sept unchanged ($1.110)
Weekly Corn Export Sales – <-29.3 K T.> old crop vs. 200-550 K T. expected – 638.7 K T. new crop vs. 400 K – 1.000 M T. expected
USDA announces 1.937 M T. new crop corn sold to China & 130.0 K T. new crop corn sold to unknown
Weekly corn export sales were a big nothing. What was a big deal was an announced sale of 1.937 M T. new crop corn sold to China. This is the biggest one-day sale ever to China. Unfortunately all it could mount was a 3 cent rally and that was given back by the close. The idea is that on August 12th the USDA will increase yield to the point that it will more than offset any increase in demand.
The interior processor basis in the Midwest reads steady to better. The interior river basis in the Midwest continues to soften while the eastern Midwest ethanol guys appear to be reaching for corn. The Gulf basis for corn is now down 10 cents over the past 2-3 days. I have to think this reflects old crop corn movement and slowing export demand for old crop corn.
The inability to hold today’s early rally attempt suggests just how much trouble the corn market is in. Price charts still suggest Dec corn will give its contract low, $3.22, a severe challenge if not take it out. The only positive that I can offer at this time is that the USDA report is till 1 ½ weeks away and already the market is being severely punished. I find it hard to believe the market will stay extremely punished going into this report. If it does stay so depressed going into the report it sets the stage for a “sell the rumor / buy the fact scenario”. Personally I think we will see some sort of short covering between now and the 12th but how low it goes first remains to be seen.
Daily Support & Resistance – 7/31
Sept Corn: ??? – $3.20
Dec Corn $3.22 – $3.30
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