July Corn closed 14 ½ cents lower ($6.38), Sept 6 cents lower ($5.36 ¾) & Dec 7 ¼ cents lower ($5.23 ¾)
Weekly Ethanol Grind as of July 2nd – 1.067 M bpd vs. 1.058 M week ago – Stocks – 21.1 M bbls vs. 21.6 M week ago
Weekly Corn Export Sales – old crop vs. -100 +350 K T. expected – new crop vs. 100-600 K T. expected
It seems the recent MO has flat price corn trying to rally during the night session only to give it up during the day session. A good part of today’s day session was one of consolidation at just slightly easier levels. When the noon weather updates came out it suggested the recently forecasted rains are well on their way for the next number of days and prices sagged down towards yesterday’s low. Those lows held but overall it was not a very reassuring day for the idea that prices will try to stand in. The adage that rain makes grain (corn in this case) is dominating the trades’ focus. Once again not much of this wet near term forecast is holding much for the Dakotas and Minnesota. CONAB reduced the Brazilian corn crop by another 3.0 M T. there was very little reaction to this as I got the impression the trade was looking for a bigger cut. We had another strong ethanol grind number but once again the trade barely gave it a second look.
On Monday the USDA will update both old cop and new cop supply-demand. Not much change is expected in the old crop carryout; down 19 M bu. In the new crop tables the USDA will use the June 30th planted and harvested acres. I don’t think they will adjust harvested acres at least until August. If they leave the yield unchanged crop size will be in the 15.166 B Bu. range. Trade ideas, however, are suggesting a slight downwards adjustment to yield suggesting a crop size closer 15.115 B bu. The new crop carryout is being suggested at 1.402 B bu.; up 45 M bu. from the June estimate. It will be interesting to see how the USDA factors in the Brazilian short fall vs. the suggested Chinese production increase.
Weather considerations will dominate the trade up until 11:00 AM on Monday (if not beyond). If the current rain forecasts live up to expectations a challenge of the $5.00 is not out of the realm of possibilities. One has to realize that recent forecasts are calling for plenty of moisture for the central parts of the Corn Belt while its corn crop is going through pollination.
Daily Support & Resistance – 07/09
Sept Corn: $5.23 ($5.13) – $5.50
Dec Corn: $5.10 ($5.00) – $5.35
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.