March Corn closed 1 cent lower ($6.20), July 3 ½ cents higher ($6.14 ¼) & Dec 2 ¼ cents higher ($5.69 ¾)
The corn market’s big feature today was the March contract spiking to 10 cents higher at $6.31 only to finish down 1 cent at $6.20. It looks like the midday high attracted an influx of cash selling which not only weighed on the flat price but the bull spread as well within the current crop year. The July/Dec spread managed to gain another 1 ¼ cents. The stimulus behind the flat price rise continues to be ongoing demand as well as the spillover from the Ukraine/Russia issue. SA weather continues to show improvement beneficial to crop development.
Here’s a look at interior corn basis changes vs. one week ago – the Ohio River 5 cents better, Decatur, IL 2 cents better, Cedar Rapids 7 cents better, Toledo 3 cents lower, Seneca, IL 4 cents lower and the Gulf 14-15 cents better. These changes suggest that processors continue to grind away while river locations are on the defensive yet the Gulf continues to rally. Yesterday the March/July corn spread traded at a 12 cent inverse – today it traded down to a 5 cent inverse. Is the spread action trying to tell us something other than an influx of corn movement?
The lead contract, March corn, comes within 2 cents of its interim contract high made on June 10th. March corn’s contract high is $6.40 ½ made on May 7th. My interpretation of a weekly continuation corn chart shows good resistance at $6.35 to $6.40. I know the Ukraine/Russia issue has been in part a driving force of the recent rally. Will today’s suggested reversal in the March contract hold any weight vs. the ongoing geopolitical issue?
Daily Support & Resistance – 01/26
March Corn: $6.10 – $6.28
July Corn: $6.06 – $6.20
The risk of trading futures and options can be be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.