July Corn closed unchanged ($6.58 ¼), Sept 4 cents lower ($5.67) & Dec 4 ¼ cents lower ($5.39)
USDA announces Corn Export Sales – 1.360 M T. new crop sold to China
Weekly Ethanol Grind – 1.032 M bpd vs. 979 K week ago – Stocks – 19.4 M bbls vs. 19.4 M week ago
Weekly Corn Export Sales – old crop vs. -300 +400 K T. expected – new crop vs. 3.000-4.500 M T. expected
It was an ugly start to the corn market on Wednesday as it got caught up some grand scale general commodity liquidation. At one point July corn was down 21 plus cents and the Dec a near similar amount. Direct corn news of the day was anything but bearish and that led old crop to recover all of the early losses and the new crop most of their early losses. China continues to buy US new crop corn. China has now covered about 1/3 of their USDA import projections and the US now has commitments for about 1/5 of the USDA’s total export projections. The weekly ethanol grind was the best we’ve seen in over a year. A Brazilian Ag consulting agency is now suggesting their 2nd season corn crop is 66.2 M T. On May 12th CONAB suggested the 2nd season corn crop was 79.8 M T.
Interior cash corn prices (basis) are running steady to better. Most interior river locations are reporting better basis levels. Processors are reporting steady to better basis levels. The Gulf corn basis continues to improve from last week’s sell-off. Corn spreads are suggesting the July contract is now moving into a world of its own as evidenced by its unchanged close vs. the new crop being 4 cents lower.
Today’s price action is suggesting the recent run of liquidation has run its course for old crop corn. It was a little tenuous early this morning when things were literally falling apart but the steady recovery during the balance of the day has to be viewed as a positive for the near term. New crop corn on the other hand; a case can be for the liquidation run to be over but I don’t see that much upside potential given the pace of planting getting us more acres and as of this writing a good start to the growing season. As of this writing my bias to the new crop leans towards a consolidating type of trade vs. the old crop’s potential for better upside retracement.
Daily Support & Resistance – 05/20
July Corn: $6.50 – $6.70 ($6.80)
Dec Corn: $5.30 – $5.50
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