March Corn expired 4 ¼ cents higher ($3.61 ½), July closed 3 ¼ cents higher ($3.79 ½) & Dec 1 ¾ cents higher ($3.94)
April Chgo Ethanol Closed $0.025 cents a gallon higher ($1.355) & May $0.025 cents higher ($1.367)
Weekly Corn Export Sales – 372.0 K T. old crop vs. 800 K – 1.200 M T. expected – 474.6 K T. new crop vs. 0-300 K T. expected
Technically inspired speculative short covering continues. I say “technically inspired” as today’s demand numbers (the export sales report) was deemed worse than disappointing. The rumor mill still talks about some Chinese corn/sorghum buying but evidence remains lacking. My rationale behind the short covering is weather related; a possible late start to early spring planting. Too much cold and snow in the Plains and too much rain elsewhere in the Midwest leads to the concern.
Interior river locations are showing higher basis levels vs. Wednesday’s postings. Processor basis reads steady to better. Gulf postings read firm as well. Bull spreads were working all the way out to July 2020. Given the firm looking basis levels one might think we’ve got a fair amount of business around. I’m thinking the firm basis is more about logistical problems involving movement vs. increasing demand. I have to think a good portion of the bull spreading is about the spec short covering as the spec plays upfront not in the deferred.
Daily momentum indicators are trying to shift into a higher mode. Flat price corn has all sorts of technical resistance sitting above current levels. May corn shows decent looking resistance starting at $3.75 and every 5 cents up from there. To keep this attempt at higher prices alive we’ll need to see either more weather fears and/or better business. As far as the weather is concerned we have clearing weather after the current system moves out. Current forecasts are suggesting 7-10 days of clear weather with near normal temps in the east and central regions of the Midwest and cooler than normal as one moves west, northwest. It’s all about the snow pack in the north and its melting that leads to the potential flooding.
Daily Support & Resistance for 03/15
July Corn: $3.75 – $3.84 Dec Corn: $3.89 – $3.99
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.