May Corn closed 2 ¾ cents lower ($3.55 ¼), July 2 ¼ cents lower ($3.64 ¼) & Dec 1 ½ cents lower ($3.82 ¼)
June Chgo Ethanol closed $0.008 cents a gallon lower ($1.324) & July $0.007 cents lower ($1.335)
Weekly Ethanol Grind – 1.036 million bpd vs. 1.024 million previous week – Stocks – 22.5 million bbls vs. 22.7 million previous week
Weekly Corn Export Sales – old crop vs. 500-800 K T. expected – new crop vs. 50-200 K T. expected
There was a fair amount of “push-pull” happening in the grain markets on Wednesday; corn included. Tuesday night saw firm price action (up 1 ¾ cents) but that faded during the day session (down as much as 5 cents). The rationale for the erratic trade ran from currently too wet to plant but with clearing weather next week (with cool temps), expected big numbers from the USDA on Friday when they update old crop Supply-Demand as well as the first look at new crop Supply-Demand and fear that the trade talks in Washington Thursday, Friday will break down even though the WH stated China wants to make a deal. It is my opinion that the trade talks’ rhetoric had the most to do with the lower prices. Many will want to tout “the too wet to plant” issue especially with “prevent plant” dates quickly approaching. Without a trade deal with China and the big corn crops coming out of SA (some are touting a record sized corn crop for Brazil) it tends to offset the possibility of some lost/unplanted corn acres.
First let me preface that no cash corn is moving; at least no new sales. Location in the Midwest dictates whether basis is higher, lower or unchanged. River locations that can get to the Mississippi River while bypassing St. Louis are showing improved basis levels. Locations north of St. Louis are showing softer basis levels. Processors are running mostly unchanged but are watching the trade talks in regard to ethanol exports. The Gulf trade is fairly erratic as it spiked higher last night but appeared a bit more subdued today. Corn spreads saw old crop losing to the new crop which I think reflects today’s fund selling.
Corn price charts are showing consolidation as the trade awaits the outcome of the trade talks on Friday, the USDA Supply-Demand reports on Friday and lastly the weather. The Tuesday, Wednesday highs in corn show the market acknowledging/honoring the recently established interim resistance levels. The mid-$3.50’s represent minor support for July corn and the mid-$3.70’s represent minor support for December corn. At this point in time all we can do is wait and see as to how the three aforementioned factors pan out. With that said I’m sitting on my hands.
Daily Support & Resistance for 05/09
July Corn: $3.58 – $3.70
Dec Corn: $3.76 – $3.87 ½
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.