July Corn closed 2 ¼ cents lower ($6.57 ¼), Sept 4 ¾ cents lower ($5.68 ½) & Dec 6 ¼ cents lower ($5.40 ¼)
Weekly Corn Export Inspections – 1.727 M T. vs. 1.700-2.200 M T. expected
Session lows were made in the Sunday night session and then tested with the beginning of the Monday day session. Initial weakness stemmed from the pace of planting, some weekend rains in the Brazilian 2nd season corn areas and the idea we are garnering additional corn acres due to the pace of planting. Weather forecasts for the majority of the Corn Belt appear to be non-threatening; actually conducive to a good start to the growing season. Shortly after the day session opening buying emerged that I think was mostly technical in nature as the recent session lows were in line with what were believed as previously established technical support. Adding to this were ideas of a short term inter-day oversold scenario. Despite the rally from the day’s lows it should noted prices never traded higher on the day.
Most interior basis locations are running steady. I do see two river locations posting slightly easier basis levels; the Ohio River and Seneca, Il. The midday posting for the Gulf was slightly easier from Friday evening. Despite these steady to easier basis levels July corn is back to asserting itself vs. the Sept and the new crop.
The trade is expecting to see the planted rate for corn at 91% completed. Ideas ranged from 90% to 93%. The USDA reports that 90% of the intended corn has been planted vs. the 5-year average of 80%. The USDA goes on to say emergence is 64% vs. the 5-year average of 54%.
The recent 5-6 days of price action is trying to suggest the corn market is trying to move into a consolidation pattern. The longer term bias remains for lower prices but its hard to ignore sharp inter-day breaks since last Monday have uncovered buying. I would like to see a rally to test some of the resistance levels that were created from the break of two weeks ago but as of this writing I’m not sure what will get us there. That’s why I have a short term bias leaning towards consolidation.
Daily Support & Resistance – 05/25
July Corn: $6.43 – $6.70
Dec Corn: $5.30 – $5.54
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