July Corn closed 3 ½ cents lower ($6.79 ¼), Sept 14 ½ cents higher ($6.21) & Dec 11 ¼ cents higher ($6.02 ¾)
Weekly Corn Export Inspections – 1.413 M T. vs. 1.400-2.200 M T. expected
Sharply higher during the Sunday night session as the spec trade responds to the perception of hot & dry during the weekend and forecasts suggesting this weather may last longer than originally thought. The day session brings us profitaking from the idea there just might be enough rain around with moderating temps over the next week or so. Most forecasts agree with the idea that what moisture is around in the near term will favor the eastern corn belt with the western northwestern reaches coming up short.
The old crop corn basis appears to be under pressure at most interior locations including the gulf. It seems the Sunday rally elected a fair amount of resting orders to sell old crop cash corn. Couple this with today being the first day of the “big boy” index fund roll and the end result were the old crop/new crop spreads literally crashing and burning to levels not seen since mid-late April. It does need to be noted that bull spreads were working with the September contract taking the lead. The idea that old crop corn stocks are tightening places a great deal of importance on the success of the early crop.
The USDA is rating the US corn crop at 72% GE vs. 76% GE last week. This compares to 75% GE one year ago. Trade expectations ranged from 72% GE to 75% GE.
The Sunday night rally has July corn honoring the resistance that was established in early May; $7.00 to $7.30. July corn traded as high as $7.06 Sunday night before breaking down to the $6.75 level in the latter part of the day session. Dec corn sees similar price action; highs in the night session respecting the resistance that was established in early May and the day’s lows during the day session. The profitaking break during the day session was nowhere near as severe as seen in the old crop. Index fund rolling passive longs to the Dec as well as respect for possible weather problems supports the new crop. Going forward for the next couple of weeks daily direction will be decided by the daily forecasts. As of this writing forecasts are such that focus will be on buying breaks to recently established support levels.
Daily Support & Resistance – 06/08
July Corn: $6.65 – $6.95
Dec Corn: $5.90 – $6.20
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.