March Corn closed 4 cents lower ($4.92 ¼), July 3 ½ cents lower ($4.91 ¼) & Dec ¼ cent higher ($4.40 ¾)
Jan Chgo Ethanol closed unchanged ($1.520), Feb unchanged ($1.533)
USDA announces Corn Export Sales – 108.5 K T. Colombia
Weekly Corn Export Inspections – 1.130 M T. vs. 800 K – 1.200 M T. expected
The end result of today’s corn trade was all about profitaking/position squaring ahead of tomorrow’s USDA production/supply-demand update. The Sunday night portion of the trade was spent at steady to higher values while the Monday day session was spent at mostly lower values. The latest COT report from the CFTC suggests near record long positions from the spec sector. Over the weekend we saw some rains over “some” of the dry areas of Argentina. The latest forecasts call for more “hit or miss” rains. Over the weekend the Argentine government stepped back from last week’s ban on corn exports until March 1st. They will now allow 30 K T. per day. The Argentine producer says that is not enough and he will continue keep his grain off of the market.
The interior Midwestern corn basis reads steady to lower. I’m not sure we are seeing that much corn move vs. precautionary measures by the end-users in case of bearish reactions to reactions tomorrow’s USDA report. The Gulf basis eased at its midday posting but overall remains quite strong. Bears spreads were the MO of the day not only within the old crop but old crop vs. new crop as well. This was in keeping with the flat price sell-off.
Is the spec trade too long? Will their length prompt a “buy the rumor – sell the fact” scenario? From a technical point of view the market is ripe for a sharp correction given the spec length. The “however” is that all we could see is just a correction until more is known about the SA corn crop more specifically the Argentine crop as this crop will hit the World market long before the 2nd season Brazilian crop.
Daily & Resistance – 01/12
March Corn : $4.80 ($4.70) – ???
July Corn: $4.79 ($4.69) – ???
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