July Corn closed 4 ¼ cents higher ($6.24 ½), Sept 6 cents higher ($5.47 ¼) & Dec 5 cents higher ($5.20 ¾)
Weekly Ethanol Grind – 1.011 M bpd vs. 1.032 M week ago – Stocks – 19.0 M bbls vs. 19.4 M week ago
Weekly Corn Export Sales – old crop vs. -100 +400 K T. expected – new crop vs. 5.900-7.000 M T. expected
Looks like we saw some margin call selling right out of the box this morning. News wires printed stories about China may have cancelled some old crop corn previously made purchases. The early selling climaxed July corn 3 cents shy of the $6.00 mark and just a ¼ cent shy of the $5.00 mark in December. Given the intense selling of the past two days a void of selling existed over the market enabling the impressive snap back. July corn rallied 26 cents off the day’s low and Dec 23 cents off of its low. The weekly ethanol grind was another stout 1.011 M bpd showing last week’s million plus number was not a fluke. On the break its being touted S. Korea may have bought up to 200 K T. of corn.
Most interior cash corn locations are not showing much change with their advertised basis. I am seeing one eastern Midwest processor jump his basis by 10 cents. If you recall it was the eastern Midwest that led basis levels higher way back when. The gulf basis is mostly steady at its midday posting. July corn continues to lose to the Sept and Dec suggesting index rolling has started in earnest. Sept is now the leader of the bull spreads. Whether or not Sept can maintain this leadership role remains to be seen. The outcome of the 2nd season corn in Brail will have a say as will the June forward growing conditions in the Midwest. In the short term forecasts look conducive to a good start but some of the longer term forecasts are leaning towards warm and dry conditions.
So – have we exhausted the liquidation/selling for now? Where we stopped today so close to the even dollar levels, $6.00 in July, $5.00 in Dec, will suggest we may have. In the short term I’m not sure we have enough to sustain much of a bounce other than some consolidation. Longer term rally potential will have to come from weather considerations and I don’t think we are there yet.
Daily Support & Resistance – 05/27
July Corn: $6.15 – $6.37
Dec Corn: $5.10 – $5.32
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