March Corn closed 25 cents higher ($5.17 ¼), July 25 cents higher ($5.16 ¼) & Dec 16 ¾ cents higher ($4.57 ½)
Jan Chgo Ethanol closed unchanged ($1.520), Feb unchanged ($1.533)
It’s been quite some time since the corn market traded “Limit Up” and stayed there through the close. Corn options are suggesting prices could be another 6-8 cents higher for tonight’s trade.
Quarterly Corn Stocks come in 628 M bu. less than expected and 5 M bu. less vs. one year ago – the 2019/20 carryout/2020/21 carryin was cut by 76 M bu.
Corn Production comes in 288 M bu. less than expected and down 325 M bu. vs. November production. Yield comes in 3.3 bpa less than expected and down 3.8 bpa vs. November. Harvested acres decline 60 K vs. November.
US Carryout comes in 47 M bu. less than expected and declines by 150 M bu. vs. December – S-T-U 10.6% vs. 11.4 % last month
US Demand is cut by 250 M Bu. (50 M bu. feed, 100 M bu. ethanol & 100 M bu. exports)
World Carryout comes in 300 K T. greater that expected but declines by 5.13 M T. vs. December. China import projections increased by 1.0 M T. to 17.50 M T.
It is my opinion that when comparing the cut in production vs. the cut in demand the USDA has paved the way for price rationing and that’s why the extreme upside reaction today. Heaven help us if the Argentine corn crop and the 2nd season Brazilian corn crop fall short of expectations.
Interior Midwestern cash corn basis reads steady to easier from the processor and selected interior river locations. The Gulf basis is steady at recent strength. Needless to say corn spreads continue to tighten especially old crop to new crop. The July/Dec looks like its good for another 6 cents tonight.
I can’t advise chasing the rally but for sure I won’t stand in front of it. Let’s see how tonight/tomorrow sorts all of this out.
Daily & Resistance – 01/13
March Corn : $5.05 – ???
July Corn: $5.02 – ???
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.