March Corn closed 7 ½ cents lower ($5.56 ¼), July 8 ½ cents lower ($5.39 ½) & Dec 2 ½ cents lower ($4.55 ¾)
USDA Corn Supply-Demand Highlights
US – increases exports by 50 M Bu. and that’s it – carryout comes in 110 M bu. higher than expected
World – increases carryout by 2.7 M T. vs. expected decline of 4.0 M T. – total World usage declines by 2.5 M T. – looks like the price of corn is such that it is promoting increased wheat feeding
So – is the bloom off of the rose as far as the corn market is concerned since the trade did not get the cuts they wanted in both US and World carryout data? Yes, the USDA did increase China corn imports by 6.5 M T. but they also increased the China corn carryout by 4.5 M T. which suggests not all of the corn bought by China is to be used but for reserve building. Going forward focus will now turn to the Brazilian 2nd season corn crop. Their success or failure will decide if the US corn market has gone high enough. Unfortunately we won’t have an answer to that for a few more months. With all of this said suggests the best case scenario of the corn market is to develop into a trading range affair.
Most interior Midwestern cash corn locations show a steady to higher basis. The export market at midday is steady with last night’s posting. The underlying tone remains firm. Old crop corn spreads showed a steady to tighter bias while old crop is a noticeable loser to the new crop.
Today’s price action throws a noticeable reversal at us; new contract highs, outside day closing lower. Given today’s reversal I’m thinking our best case scenario going forward is the development of a trading range. My shorter term bias is to see some liquidation. $5.30 (March) is my first decent level of support. After that we look at something closer to the $5.00 level. $5.70 should be our resistance for now.
Daily Support & Resistance – 02/10
March Corn : $5.45 – $5.64
July Corn: $5.30 – $5.48
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.