December Corn closed 8 ½ cents higher ($5.25 ½), March 8 cents higher ($5.33) & May 7 ½ cents higher ($5.37 ½)
Weekly Ethanol Grind – Production – 926 K bpd vs. 937 K week ago – Stocks – 20.1 M bbls vs. 20.0 M Week ago
Weekly Corn Export Sales – old crop vs. 300-800 K T. expected – new crop vs. none expected
Flat price corn gives us an impressive performance today. Prices were firming from last night into the day session as it seems the recent talk of the “tar spot” disease is starting to get a bigger response. We first heard about this two weeks ago but it seemed many were pooh-poohing this. The general media is now picking up on this and the spec trade is responding. The morning rally had a brief hiccup when the EPA released a document proposing cuts to the biofuel blending obligations for 2020, 2021 & 2022. The downside hiccup, 6-7 cent break, didn’t last too long as administration officials cautioned that the numbers are not final and still subject to revisions before clearing an interagency review process. Flat price corn came bouncing back to make new highs for the session. Strong Crude oil as well as strong wheat prices added to the corn market’s support.
From a technical point of view the corn market appears in line to test the highs we saw mid last week, $5.37 ½ (Dec). Longer term weekly charts suggest immediate resistance beginning at the $5.40 level and up to the $5.60 level. This level represents the neckline of the weekly corn chart top. The “however” to all of this comes down to yield and demand. Demand for US corn has been almost slack recently despite Brazil’s short fall with its second season corn crop. As far as yield is concerned I’m not sure we’ll see much of change on the October report despite ideas that when the yield increases from August to September it will increase again in October. For what it is worth most interior cash markets are reflecting the developing harvest pressure while the Gulf demand has been improving.
Daily Support & Resistance – 09/23
Dec Corn: $5.20 – $5.30 ($5.35)
March Corn: $5.27 – $5.38 ($5.42)
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