Dec Corn closed 5 cents higher ($4.13 ¾), March 3 ½ cents higher ($4.16 ¾) & July 2 ½ cents higher ($4.18)
Nov Chgo Ethanol closed $0.051 cents a gallon higher ($1.520), Dec $0.051 higher ($1.495)
Weekly Ethanol Grind as of 10/16 – 913 K bpd vs. 937 K week ago – Stocks – 19.7 million bbls vs. 20.0 million week ago
Weekly Corn Export Sales – old crop vs. 800 K – 1.400 M T. expected – new crop vs. none expected
The story hasn’t changed – it’s all about demand or at least further anticipated demand from the export sector. I say the export sector as the weekly ethanol grind was rather feeble looking. Most interior Midwestern locations are featuring a rebounding basis. The Gulf remains strong. Spreads remain strong. All of this is telling us the cash market needs more corn. Not only are US prices for corn strengthening but worldwide as well. Weather in SA has been a supporting issue but I’m being told beneficial weather is on the way as soon as the next 48 hours and lasting for about two weeks. If true its exactly what they need down there. Some naysayers of the current rally are trying to say the spec/funds are getting too long. That may be true but as long as we have actual cash corn demand it will be difficult to sustain much of a break. Demand led bull markets tend to be more orderly as they grind higher vs. supply fear led bull markets that tend to feature greater volatility. Today’s bottom line – Until I see the cash corn market give up the ship prices will be biased to grind higher.
I’m not seeing anything bearish with the price action. Attempts to correct intra-day have been met with buying. After today’s action I’m hearing more and more talk of $4.23-$4.24 which are contract highs. So is the market overbought – the 14-day RSI for Dec corn stands at 76.89. Daily momentum indicators are starting to get a bit high but I’ve seen them higher. Yes, the market has room to correct. That’s the key word “correct”. Until I see an alternative source for corn develop we should see prices stay relatively firm.
Daily Support & Resistance – 10/22
Dec Corn: $4.07 – $4.18
March Corn: $4.10 – $4.21
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