Corn Commentary

storck

Corn – Just My Opinion

Dec Corn closed 4 cents higher ($4.09 ¼), March 3 ½ cents higher ($4.14 ¾) & July 3 ¼ cents higher ($4.18 ¾)

Dec Chgo Ethanol closed $0.050 cents a gallon higher ($1.400), Jan $0.050 cent higher ($1.385)

Weekly Corn Export Sales – 2.610 M T. old crop vs. 1.800-2.500 M T. expected – 541.0 K T. new crop vs. none expected

USDA announces Sorghum Export Sales – 106.0 K T. sold to China

Flat price corn roars higher late in the Wednesday night session, early in the day session. At one point Dec corn was up as much as 12 cents, March, May & July up 10-11 cents. The balance of the session was spent giving back a good portion of the early gains finishing with just modest gains on the day. Factors behind the rally can be attributed to great looking weekly export sales, a lower US Dollar, weather worries for SA (dryness) and lastly sharp strength elsewhere in the Ag complex (soybeans & wheat). Adding to all of this is the anticipation of a bullish report from the USDA next Tuesday. The Reuters news service released their trader survey results overnight which suggests the projected carryout will fall by 134 million bu. to 2.033 billion bu., the national yield will decline by 0.7 bpa to 177.7 bpa and production will decline by 63 million bu. to 14.659 billion bu. The difference in the decline in production vs. the decline in carryout will be attributed to an increase in usage thought to be in exports and feed demand vs. a decline in ethanol usage.

Interior cash corn markets continue to trade all over the place., Decatur, IL is up 5 cents to 20 cents over and Cedar Rapids is steady at option price. Interior river locations are the most erratic. Over the past two days the Ohio River basis has declined by 20 cents to 26 under. Seneca, IL is another great example – last week they were advertised at 5 over, two days later they were 22 under, then they went to 12 under and now they sit 19 under. The Gulf continues to show a defensive bias despite a minor bounce from yesterday morning. Corn spreads showed a fractional bullish bias within the current crop year while this year gains on next year.

Today’s early rally had Dec corn spiking into the resistance that was made early last week. March corn doubled topped against last Tuesday’s high. July corn made new highs over and above last week’s high. The profit taking we saw ensue left us with only modest gains on the day. Going forward the trade will continue to monitor SA weather, the US Dollar as well as any new announced sales. Anticipation of a bullish report from the USDA on Tuesday should limit further corrections. As of this writing Dec corn should now find support on challenges of $4.00 while March should realize support closer to $4.07-$4.08.

Daily Support & Resistance – 11/06

Dec Corn: $4.03 – $4.14

March Corn: $4.08 – $4.19 

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