July Corn closed 5 ¾ cents higher ($6.58 ¼), Sept 4 ½ cents higher ($5.71) & Dec 6 cents higher ($5.43 ¼)
USDA announces Corn Export Sales – 1.360 M T. new crop sold to China
Flat price corn’s retracement of last week’s break stays alive. Prices surged higher early on a slower pace of expected planting (overall still above the norm) and China continuing to buy new crop corn at a record clip. At one point July corn was up 17 cents and Dec up 12 cents. As the day went on selling appeared trimming the gains to almost unchanged on the day. Some late short covering buoyed prices back to modest gains for the day. Going forward the pace of planting is expected to stay above the norm as the only laggard, the state of Ohio, is expected to pick up the pace this week. I also think there was shift back to planting soybeans.
Interior basis levels ran mixed on the day. Some river locations bounced back from recent easing. The midday posting at the Gulf also showed some modest improvement. Bull spreading was featured on the early surge higher but like the flat price those gains eased as the day went on. The July/Dec spread at one point was up almost 6 cents only to finish with a fractional loss. July gains on Sept while Sept loses to the Dec. The pace of planting suggests will see a fair amount of early corn.
As the flat price tries to retrace some of last week’s losses it is fairly noticeable that the rate of gain pales vs. last week’s losses. With that said a case can be made that a top in the corn may be in the making. If this is true July corn should realize resistance from $6.75 to $6.85. Dec corn’s attempt to retrace last week’s break appears to be much feebler. This can be rationalized with the idea we are garnering additional acres which in turn offsets the record pace of China’s new crop buying.
Daily Support & Resistance – 05/19
July Corn: $6.48 – $6.70
Dec Corn: $5.34 – $5.53
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