Dec Corn closed 5 cents higher ($4.22), March 4 cents higher ($4.23 ¾) & July 3 ½ cents higher ($4.27 ½)
Jan Chgo Ethanol closed unchanged ($1.320), Feb unchanged ($1.320)
USDA announces Corn Export Sales – 257.0 K T. sold to Mexico
Weekly Ethanol Grind (12/04) – Production – 991 K bpd vs. 974 K week ago – Stocks – 22.1 M bbls vs. 21.2 M week ago
Weekly Corn Export Sales – old crop vs. 700 K – 1.500 M T. expected – new crop vs. none expected
Flat price corn firms on Wednesday in anticipation of friendly data on Thursday. CONAB (the Brazilian version of our USDA) will update corn production potential. Most are with the idea we could see cuts of 1-2 M T. Shortly after the CONAB report we’ll get weekly export sales. The trade more times than not expect to see decent sales numbers this season. The USDA will update Supply-Demand (this report will NOT update US production) tomorrow mid-morning and a slight reduction is expected in the projected carryout. If the USDA does indeed cut ending stocks it would be due to a hike in exports. Personally I think the USDA will leave the projected corn carryout unchanged at 1.702 billion bu.
The interior corn basis doesn’t do a whole lot. If there are any changes they are slightly better. This is the time of year we don’t normally see new cash corn sales. The Gulf basis is steady at best which tells me we have enough corn in the pipeline to handle the current demand. Spreads had a bullish bias all the way out to the new crop. This goes along with the better flat price as trade ideas suggest the biggest risk is to the upside not the downside.
The recent price action suggests flat price corn is in a holding pattern. This holding pattern follows a recent sell off which further suggests the trade wants to see more indications of better weather for the SA crop as well as the possible resurgence of export demand. The $4.14-$4.15 level (March) has been set up as the new downside pivot. Conclusive closes below this level will suggest a move down towards the $4.00 level. The mid-$4.30’s is still considered resistance unless dramatic demand increases are confirmed.
Daily Support & Resistance – 12/10
March Corn: $4.15 – $4.30
July Corn: $4.19 – $4.34
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.