March Corn closed 4 cents lower ($5.22), July 5 ¾ cents lower ($5.19 ¼) & Dec 6 cents lower ($4.49)
February Chgo Ethanol closed unchanged ($1.630), March unchanged ($1.605)
Flat price corn enters its third day of liquidation. Call it over bought from a technical point of view, call it the perception of better weather for the developing SA corn crop; call it what you want as the bottom line is the market was due for a correction. I’m told the Argentine producer has been a big seller the past couple of days as he is fearful of the government instituting new restrictions involving export.
The interior Midwestern cash corn market has a mixed look but overall given the flat price basis levels remain decent. The Gulf continues to ease a bit but still a pretty healthy basis given where the flat price is. Spreads activity showed a bullish bias within the current crop year while the old crop/new crop spreads ran mostly steady with only fractional changes.
Flat price corn charts clearly suggest we have entered a liquidation/correction phase. The best looking congestive type of technical support comes in at or just below the $5.00 level (March). I don’t see the market collapsing as we have a pretty good export program to deal with until the Argentine and 2nd season corn crops come online and that remains sometime away. If we are looking at just a correction and higher prices remain in the offering expect some jerking around (downflagging if you will) over the near term. Challenges of the recent highs followed by failure is what it will take to suggest the party is over.
Daily & Resistance – 01/21
March Corn : $5.12 (?) – $5.34
July Corn: $5.09 – $5.31
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