December Corn closed 13 ¾ cents higher ($5.57 ¼), March 13 ¾ cents higher ($5.66) & May 13 ½ cents higher ($5.69 ¾)
Weekly Ethanol Grind as of 10/22 – 1.106 M bpd vs. 1.096 M week ago – Stocks – 19.9 M bbls vs. 20.1 M week ago
Weekly Corn Export Sales – old crop vs. 800 K – 1.300 M T. expected – new crop vs. 0-20 K T. expected
Today’s rally to levels not seen since August 19th was all about the weekly grind for ethanol. At 1.106 bpd it was just 2 K bpd shy of the Dec 2017 record. Couple this with the slow down in harvest, the suspect production levels for both the US and China had prices off to the races shortly after the morning’s re-opening. If this pace of ethanol grind continues to the USDA will have to re-adjust its idea on the annual grind on the next supply-demand report.
With it being too wet in many areas of the Midwest to harvest interior river basis levels come marching backup almost as fast as they went down when harvest was going full tilt. The processor basis continues to stand in and rightly so given the money he is making with the very profitable ethanol grinding margins. It is these margins that is responsible for the near record grind pace last week. The gulf basis is inching back up to levels we saw earlier this month. Spreads run steady to fractionally tighter out to May, noticeably stronger vs. July forward.
Never did I think on Monday we would be looking at $5.60 + corn prices today; yesterday morning’s early low was $5.33. What’s interesting to note this market is nowhere near overbought. This holds true with daily technical data as well as with shorter term multi-hour technical data. I’m always cautious of chasing rallies but one has to admit the past two morning have given us opportunities for ownership that has been lower on the day (and I’m not talking fractionally lower). Weekly export sales should set the tone for Thursday’s trade. It’s a cheap call but I would not be surprised to see an inside day of today.
Daily Support & Resistance – 10/28
Dec Corn: $5.49 – $5.69
March Corn: $5.58 – $5.78
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