May Corn closed 7 ¼ cents lower ($3.55 ¾), July 6 ½ cents lower ($3.64 ¼) & Dec 5 ½ cents lower ($3.82 ¼)
June Chgo Ethanol closed $0.011 cents a gallon lower ($1.325) & July $0.015 cents lower ($1.337)
Weekly Corn Export Inspections – 976.8 K T. vs. 700 K – 1.200 M T. expected – cumulative to date 35.624 M T. vs. 58.42 M T. projected by August 31st
US Corn Crop Progress – 23% planted vs. 25% expected vs. 46% 5-year average – Emerged – 6% vs. 13% 5-year average
Tweets from the WH on Sunday suggesting the possibility of additional tariffs by week’s end against China sent grain markets into a swoon Sunday night. Evidently last week’s talks found some stumbling blocks that the Chinese were not willing to make adjustments. A Chinese spokesperson said their trade delegation would still come to the US this week but it was unclear if any of their high ranking officials would attend. All of this led to speculation as to whether or not a trade deal was possible anytime soon.
This news had flat price old crop corn down as 15 cents in the first few minutes of the Sunday night trade; new crop corn down as much as 13 ½ cents. The day session brought us some short covering as the corn market will be looking at a very wet week this week for a good portion of the Corn Belt. Forecasters do call for some clearing by this weekend and into next week but with cool temperatures. Forecasters that are will to stick out their necks beyond next week do suggest the return of wet weather. Additionally; on Friday the USDA will give us their first look at the 2019/20 crop. Some of the questions in the trade are will the USDA cut yield and/or acres due to the late planting start. Given this report and the threatened additional tariffs anxiety should be running quite high.
The interior corn basis is running steady to easier vs. values seen late last week. Processors appear to be backing off along with the lower ethanol prices. Some interior river locations are easing due to logistical problems (high water). The Gulf, however, jumps higher in anticipation the logistical problems are not going to go away anytime soon. Corn spreads eased on the day especially the old crop/new crop spreads.
Delayed planting leading to a possible cut in acres and yield offsets just some of the additional tariff fears. Today’s break challenged the support that was created 1 ½ weeks ago and so far it has held. Given this week’s weather forecasts (wet for much of the Corn Belt), the USDA report at the end of the week and further rhetoric involving additional tariffs against the Chinese should all work to at least a consolidating type trade between last Friday’s high and today’s low. One additional note on the upcoming USDA report; world carryout projections will be posted twice – one figure with Chinese stocks and one figure without Chinese stocks. Last month Chinese corn stocks were 204.8 M T. of the total 314.0 M T. World stocks
Daily Support & Resistance for 05/07
July Corn: $3.60 – $3.68
Dec Corn: $3.78 – $3.86
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