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Corn – Just My Opinion

March Corn closed 2 cents lower ($5.99), July 2 cents lower ($5.98) & Dec ¾ cent higher ($5.58 ¼)

Weekly Corn Export Sales – old crop vs. 500 K – 1.500 M T. expected – new crop vs. 0-100 K T. expected

USDA announces Corn Export Sales – 100 K T. to Unknown

Weekly Ethanol Grind (01/07) – 1.006 M bpd vs. 1.048 M week ago – Stocks – 22.9 M bbls vs. 21.4 M week ago

Dec 1st Quarterly Corn Stocks – 11.647 B bu. vs. 11.602 B bu. expected

Highlights of January Supply/Demand Corn ReportUS – USDA increases harvested acres by 300 K, leaves yield unchanged, increases production by 53 M bu., reduces carry in by 1 M bu., increases ethanol usage by 75 M bu., reduces exports by 75 M bu., increases carryout by 47 M bu. – S-T-U 10.38% vs. 10.06% month ago vs. 8.33% year ago – World – reduced carry in by 460 K T., lowered production by 1.77 M T., increased usage by 240 K T., reduced carryout by 2.45 M T.

If one did know we had a slew of USDA reports today it could be suggested that corn prices were caught between weak wheat prices and strong soybean prices. But we did have a slew of reports today; the domestic data for corn was deemed bearish while the global data for corn was mildly supportive. The end result had corn prices crashing right after the numbers were released but shortly after those prices came back to unchanged to mildly higher on the day. The bottom line to our short-term direction is the weather for SA. It is amazingly hot & dry down in southern Brazil and Argentina as we speak but weather forecasters suggest rain and cooler weather beginning this weekend. It remains to be seen if this forecasted weekend weather represents a change in the current hot & dry trend. As far as today’s numbers are concerned, I was a bit surprised at the cut in exports given what’s happening in SA. In the end this may be warranted but given the current weather issues in SA I’m thinking this cut might be a bit premature.

Interior corn basis levels continue to show a steady to steady to firmer tone. The gulf basis continues to creep higher. Spreads within the old crop ran fractionally mixed while old crop loses to the new crop. I’m thinking this is due to the USDA cutting old crop exports and the upcoming battle new crop is going to have with new crop soybeans over acres.

We have a 3-day weekend coming at us and one of the primary issues at hand is the hot & dry weather in parts of SA. The time frame down there is similar to our 4th of July. How many times have we changed trends here in the US over the 4th of July 3-day weekend due to weather considerations? If one looks at a corn chart (close only) you can see by today’s price action this market does not want to break down. What happens if the weekend forecasted weather becomes a bust or the forecasted weather comes to fruition? It’s called high anxiety going into the upcoming 3-day weekend.

Daily Support & Resistance – 01/13

March Corn: $5.95 – $6.05 ($6.12)

July Corn: $5.94 – $6.04 ($6.11)

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