Corn Commentary


Corn – Just My Opinion

May Corn closed 6 ½ cents higher ($5.92), July 6 ¾ cents higher ($5.80 ½) & Dec 8 cents higher ($5.20 ¼)

Weekly Corn Export Inspections – 1.524 M T. vs. 1.400-2.100 M T. expected

Corn futures were strong right out of the box led by the old crop Sunday night. As the session went on new crop took over the upside leadership role. Old crop remains strong in lieu of tight stocks while the new crop was strong on what appears could be a late start to planting. New crop corn needs acres and sustained delays are not a way to accumulate acres. Granted it remains relatively early but forecasts as of this writing don’t look all that conducive to an early timely planting. Weekly export inspections came in at the low end of expectations.

Export values at the Gulf have been softening suggesting more than ample supplies are in the pipeline. The interior processor continues to show a strong basis while river locations are showing a softening basis. Spreads ran easier in the old crop while new crop gains on the old crop. May option expiration at the end of the week may continue to weigh on the nearby spread. At the end of the following week we’ll be looking at deliveries against the May contract which may further weigh on the nearby spread. My however to all of this is that I don’t think we’ll see many deliveries if any at all.

$6.00 remains a formidable hurdle for old crop corn (May contract). The make-up of deliveries will dictate whether of not this level continues to act as resistance or we move beyond that level. As of this writing I don’t see anything bearish in the price action. It is a bit spooky that the managed funds are long over 400 K contracts but then again what’s bearish about the corn market? It is my idea corn futures, including the new crop, will stay firm until we see a better planting window develop. The bottom line – old crop is tight and the new crop needs additional acres. Higher prices remain in the offering.

The USDA reports corn planted at 8%; 1% shy of what the trade was expecting. This is line with the 5-year average.

Daily Support & Resistance – 04/20

July Corn: $5.71 – $5.87 (?)

Dec Corn: $5.13 – ??? 

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.