December Corn closed 5 ½ cents higher ($5.43 ½), March 5 ½ cents higher ($5.52 ¼) & May 5 ¾ cents higher ($5.56 ¼)
The rumor mill rallied corn prices out of early morning low. Prices initially traded lower along with the profit taking in the wheat market. One of the rumors involved ethanol exports to both Brazil and the EU. US ethanol to Brazil has happened before and makes sense given their short corn crop this year. US ethanol into the EU doesn’t make a lot of sense since the EU is not wild about taking in US ethanol. The second rumor brings into focus the size of the Chinese corn crop. There has been a lot of talk about flooding in key corn producing regions. Corn futures on the Dalian exchange has been slowly grinding higher and now we see a noticeable jump higher on substantial volume. So here you have it – strong demand from the ethanol sector and now a possible improvement in exports.
Past weekend weather brings harvest activity to a screaming halt within much of the central areas of the Midwest. With that said recently weak river basis are staging an abrupt turn around. This holds true for the Gulf as well. The processor basis stands in at fully steady. Corn spreads ran mostly steady out to July.
The flat price grind higher continues. Since the Sept low the best price seen is $5.48 ½. Today we traded at $5.47 ¼. It would not surprise me if we traded through that previous high. What would surprise me if we traded through the $5.55-$5.60 level.
Daily Support & Resistance – 10/27
Dec Corn: $5.37 – $5.50
March Corn: $5.46 – $5.59
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.