Corn Commentary


Corn – Just My Opinion

Dec Corn closed 9 cents lower ($4.08 ¼), March 8 ¾ cents lower ($4.18 ¼) & July 7 cents lower ($4.25 ¼)

Dec Chgo Ethanol closed $0.030 cents a gallon higher ($1.450), Jan $0.005 higher ($1.410)

Weekly Ethanol GrindProduction – 977 K bpd vs. 961 K week ago – Stocks – 20.2 million bbls vs. 19.7 million week ago

Weekly Corn Export Sales – old crop vs. 700 K – 1.600 M T. expected – new crop vs. none expected

Profit taking/liquidation has erased a good portion of the rally that was prompted by Tuesday’s USDA production/supply-demand report. So what’s behind this wave of selling? Some will say the spec is too long. The next CFTC Commitment of Traders report will encompass a 25 cent rally (Tuesday close to Tuesday close) and if you believe the daily fund report 50-70 K new longs. Another factor that I’m looking at is the sharp decline in basis at the Gulf. The midday posting suggested the bid side of the equation went unquoted and the offer side was 6 cents from last night. I have to wonder if the Gulf pipeline is plugged with cash corn. Others will say it will be a tough test for the US to export 67 M T. of corn this marketing year. For what it’s worth today was the last day of the index fund roll. Since October 27th the Dec/March spread has declined 10 cents.

Today’s break went a few cents deeper vs. last night’s thoughts especially in the nearby contracts. I would like to write that off to increased volatility that went along with the recent rally. Short term inter-day and intra-day charts went with a fair degree of oversold. Weekly export sales are out in the morning and given the spread between the low guess and the high guess I get the impression no one knows for sure. Unless Tuesday’s USDA report was one of the biggest head-fakes we’ve seen I think this break should be faded at or near current levels for at least a test of the mid-week highs.

Daily Support & Resistance – 11/13

Dec Corn: $4.03 – $4.14

March Corn: $4.13 – $4.24 

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