Corn Commentary


Corn – Just My Opinion

March Corn closed 7 cents higher ($6.27), July 5 cents higher ($6.19 ¼) & Dec 3 cents higher ($5.72 ¾)

Weekly Ethanol Grind (1/21) – 1.035 M bpd vs. 1.053 M week ago – Stocks – 24.5 M bbls vs. 23.6 M week ago

Weekly Corn Export Sales – old crop vs. 600 K – 1.200 M T. expected – new crop vs. 0-200 K T. expected

Talk out of the Brazilian state of Rio Grande do Sul (RGDS) around crop losses allows the corn market to reverse earlier losses that were influenced by a correcting wheat market. 1st season corn crop is Brazil is used mostly for domestic purposes. A short 1st season corn crop will cut into their 2nd season crop which is mostly used for export. The weekly ethanol grind stays above the 1.000 M bpd level despite building stocks. The bottom line here is that we have good domestic demand and we have good export demand. As to how long export demand stays good is up to the 2nd season corn crop out of Brazil.

The interior corn basis runs mixed; the Ohio River is a touch better; Cedar Rapids eases a touch while Council Bluffs shows some modest improvement. The gulf continues to move higher. Bull spreads within the old crop bounce back from yesterday’s sell off and the July/Dec continues to move higher.

Corn bounces back from what appears to be a short-term correction. Today’s close was the third highest close of the contract. New crop corn continues to grind higher in its fight for acres. Overall I see nothing bearish with the recent price action. I am watching the weekly continuation corn charts as the nearby should experience some resistance as it approaches the $6.40 level.

Daily Support & Resistance – 01/27

March Corn: $6.19 – $6.34 (?)

July Corn: $6.12 – $6.27(?)  

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.