May Corn closed 5 cents higher ($3.47 ½), July 4 ¾ cents higher ($3.56 ½) & Dec 4 ½ cents higher ($3.76 ½)
June Chgo Ethanol closed $0.005 cents a gallon higher ($1.305) & July $0.004 cents higher ($1.316)
Weekly Corn Export Inspections – 1.000 M T. vs. 850 K T. 1.100 M T. expected – Cumulative 36.633 M T. vs. 58.42 M T. target
Weekly Corn Crop Progress – 30% planted vs. 35% expected vs. 66% 5-year average – Emerged – 10% vs. 29% 5-year average
Flat price corn registers a major looking upside “key” reversal on Monday; new contract lows, outside day, closing above the previous day’s high. The new contract lows came early as China announced their retaliation tariffs vs. the tariffs imposed by the US on Friday. What I thought was interesting about their tariff proposals were it was only against $60 billion of US goods and the additional tariffs were only 5% and 10%. The bottom line to the China/US rift is that it won’t get any worse for at least the next few weeks. The supporting issues were the spec trade being grossly short and the ongoing planting woes. Granted we will see some planting progress this week but forecasters suggest the wet pattern will be returning as early as this weekend. Longer term forecasts suggest the new wet pattern could be with us into early June. Additionally – no one really believes this coming year’s corn crop will achieve trendline yield due to the slow pace of planting as well as maintaining the outlined acres. “Prevent Plant” will come into focus later this month (May 25th) and early June (the 5th)
Only a couple of changes are being noted with the interior corn basis. Processors show the best basis; Lincoln, NE improves 2 cents. Interior river basis remains soft looking; Seneca, IL is off 1 cent. The Gulf appears easier vs. last week’s strength. Initially corn spreads were quite soft looking. When the flat price short covering started spreads firmed along with them. Remember that the majority of the spec shorts are upfront.
Today’s strong looking upside reversal is suggesting we’ve gone low enough for now. Just how high we rally depends on pace of planting. Spec short covering can take July futures back to the $3.65-$3.70 level; $3.75 on the outside. If today’s reversal is indeed the signaling of the low any 50% to 60% retracement of today’s rally should hold as support.
Daily Support & Resistance for 05/14
July Corn: $3.50 – $3.62
Dec Corn: $3.70 – $3.82
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.