Corn Commentary


Corn – Just My Opinion

March Corn closed 8 ½ cents higher ($4.74 ½), July 8 cents higher ($4.72) & Dec 2 ¾ cents higher ($4.33)

Jan Chgo Ethanol closed $0.013 cents a gallon higher ($1.433), Feb $0.013 cents higher ($1.443)

Weekly Ethanol GrindProduction – 934 bpd vs. 976 bpd week ago – Stocks – 23.5 M bbls vs. 23.2 M bbls week ago

Weekly Corn Export Sales – old crop vs. 500 K – 1.000 M T. expected – new crop vs. none expected

The charge higher continues!! There continues to be a lot chatter as to what’s behind the rally especially after the past couple of days. There is always the Chinese rumoring. Another idea is that the producer became oversold due to the accumulator contracts that he signed up for earlier this year when the flat price was in the dumper. As I understand it accumulator contracts call for more corn to be sold from the producer as the price rallies. Did it get to the point he doesn’t have the corn to satisfy the contracts he signed up for further suggesting the crop size has been overstated? We’ll know more about that on January 12th. Another topic of discussion is the droughty conditions in Argentina. Late in the session it was announced that Argentina will suspend corn exports until March 1st when their new crop is normally available. This sounds like the Argentine government is concerned about their new crop as well.

Interior cash corn took on a mixed look today. The Gulf basis a its midday posting showed some minor easing. Overall given the magnitude of the flat price rally basis levels remain quite firm. Spreads continue to ratchet tighter. Come next week when the new year starts will the producer restart selling some cash corn (if he has it to sell)?

The 14-day RSI sits at 82. Yes, this is an overbought state but I have seen RSI in a more extreme state. It’s hard to chase a rally like this as the higher the market goes the greater the volatility. Tomorrow represents month end, quarter end and year end. With that said expect anything and everything. Weekly charts suggest the next level of resistance comes close to the $4.95 level.

Daily Support & Resistance – 12/31

March Corn : $4.68 – ???

July Corn: $4.66 – ???

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.