Corn Commentary


Corn – Just My Opinion

Dec Corn closed 5 ¾ cents lower ($4.17 ¼), March 4 cents lower ($4.27) & July 2 ¾ cents lower ($4.32 ¼)

Dec Chgo Ethanol closed $0.027 cents a gallon lower ($1.420), Jan $0.027 lower ($1.405)

Despite seeing new highs for the ongoing rally Tuesday night the day session brought us a round of profit taking. The rationale behind the profit taking, some will say, was a noticeably lower wheat market. If you saw my opinion last night you know I saw no rationale for Tuesday’s wheat rally other than the strength in the corn and soybean market. After digesting the USDA data overnight there has been some discussion talking about if the US can really export 67.3 M T. of corn this year. Yes, it has been done in the past but given the ongoing soybean export program one has to wonder if there is space at the Gulf for this to happen.

Its my opinion that the interior cash corn prices (basis) at the interior river locations are trying to stabilize after the recent up down all around. I’m looking at a couple of processor locations that are giving their basis levels a minor boost. The Gulf is still grinding lower. Corn spreads continue to be on the defensive with the Dec leading the break. The Dec/March spread is flirting with a 10 cent carry which we haven’t seen since early October. Tomorrow should be the last day of the index fund roll so I’m thinking that once they are done we may see this spread start to bounce a little. Technical considerations suggest this spread is now in a decent state of oversold.

Flat price corn rallied 14-15 cents on Tuesday. Today we give back 3-6 cents of that. I wouldn’t call that a failure to follow through but just some normal backing and filling. From a technical point of view I see decent support below current levels. Dec corn shows some pretty decent support as it draws closer to $4.12-$4.10. March corn shows similar technical support down towards the $4.20-$4.18 level. Given the dynamics of Tuesday’s USDA report it opens the door for increased volatility. Get used to it!

Daily Support & Resistance – 11/12

Dec Corn: $4.12 – $4.24

March Corn: $4.20 – $4.33 

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