Corn Commentary


Corn – Just My Opinion

Dec Corn closed 7 ¼ cents higher ($4.03 ¾), March 5 ½ cents higher ($4.08) & July 3 cents higher ($4.09 ¼)

Nov Chgo Ethanol closed unchanged ($1.430), Dec $0.004 lower ($1.405)

Weekly Ethanol Grind (10/09) – 937 K bpd vs. 923 k week ago – Stocks – 20.0 million bbls vs. 19.7 week ago

Weekly Corn Export Sales – old crop vs. 600 K – 1.200 M T. expected – new crop vs. none expected

Upfront US export demand, dryness in SA (Brazil & Argentina) hampering new crop planting/development and push/pull from China as to what their corn needs are going forward continues to support US corn futures. SA is starting to see some rain develop but concerns are will planting then growing conditions be sustained. The current La Nina weather pattern suggests a bias to dryness. There was story out of China that this past season’s corn crop will be a bit better vs. what they grew a year ago but then what about all the buying they have been doing. We know they have depleted their reserves through multiple auctions earlier this season. We know they want to rebuild their hog herd as quickly as possible. I’m told Chinese corn prices are now trading at 6 year highs.

Interior Midwestern cash corn prices appear stable to the processor and elevators. River locations are starting to come back as the Gulf continues to move higher. The strength at the Gulf continues to suggest not enough corn is moving to satisfy their demand. Corn spreads continue to tighten on that demand.

There is nothing bearish about new highs and new high closes not only for the flat price but spreads as well. The other day I suggested $4.05 to $4.10 as upside target areas. At the pace we are going we’ll be there tomorrow ($4.10). At that point I’ll have to do some re-assessments.

Daily Support & Resistance – 10/16

Dec Corn: $3.96 – $4.10

March Corn: $4.00 – $4.14

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.