May Corn closed 2 ¼ cents higher ($3.58), July 2 ¼ cents higher ($3.66 ½) & Dec 1 ½ cents higher ($3.83 ¾)
June Chgo Ethanol closed $0.007 cents a gallon higher ($1.332) & July $0.005 cents higher ($1.342)
Short covering prompted by the slow pace planting was pretty much the corn story on Tuesday. We should see some fairly heavy moisture this week in the core of the Corn Belt. Next week’s forecasts suggest some clearing but with cooler than normal temps. Drying rates will come into question. The forecast for the third week of May is pretty much up in the air; some are thinking there will be moisture around but nowhere the amounts we have seen in recent days. Many are with the idea that if the majority of the intended corn acres are not planted by mid-month it could impact final yield. The 3rd and 4th week of May also include some “prevent plant’ dates depending on where one is in the Corn Belt. On Friday the USDA will give us its first look at Supply-Demand for the 2019-20 season (it is not an “official” production report). The numbers that I have seen being tossed around for the projected carryout are decent sized. See the attached table of guesstimates.
The interior corn basis has taken on a mixed look. Processors appear to be following the ethanol market which was a bit higher today. River locations are running mostly steady with some locations easier. The easier locations are where river traffic has slowed to a stop due to high water levels. The trend at the Gulf continues to edge higher as supplies are having a difficult time getting to the NOLA ports. Old crop corn gains on the new crop despite the idea slow planting are supporting the market. It’s in the old crop where the greatest concentrations of spec shorts are.
Corn prices appear to be in the process of closing the gap that was created from Friday’s close to Sunday night’s opening. I’m not expecting anything beyond that Friday close (May 3rd) at least not until we see what the USDA has to say on Friday as well as the outcome of the China/US trade talks Thursday, Friday.
Daily Support & Resistance for 05/08
July Corn: $3.63 – $3.70
Dec Corn: $3.80 – $3.87 ½
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