July Corn closed ¾ cent higher ($3.69 ½), Sept 1 cent higher ($3.78 ¼) & Dec 1 cent higher ($3.88 ¾)
June Chgo Ethanol closed $0.004 cents a gallon lower ($1.329) & July $0.004 cents lower ($1.336)
Weekly Corn Export Sales – old crop vs. 200-500 K T. expected – new crop vs. 100-400 K T. expected
Flat price corn surges higher once again in the Tuesday night session and again in the early part of the day session. At one point corn prices were up 10 cents or so. Profit taking soon set in as short term technical data was reading quite over bought. Additionally it looked like we saw a fair influx of cash movement. The profit taking should not have been unexpected as since Monday’s low to today’s high July corn had rallied 43 cents and Dec corn had rallied 34 cents. Near term forecasts have not changed; the western, northwestern reaches of the Corn Belt will be seeing a fair amount of moisture over the next number of days. The eastern reaches of the Corn Belt will see moisture but not like the excessive amounts that are being forecasted further west.
The interior cash corn markets are all over the place; some higher, some lower and some unchanged. For the near term the river ways are open; for how long given the forecasts I’m not sure. Processors continue to show the best basis levels. The Gulf appears to be easing in response to the opening of the river ways as well as the pick-up in old crop corn movement. The nearby corn spread had some fractional easiness. It was interesting to note the 2019-20 crop year rallying vs. the 202-21 crop year. This further suggests the idea of lower corn acres this year as well as a lower yield.
The profit taking we saw today was in response to the short term overbought. Years ago when the funds became a presence in the grain markets the adage was give them three days to start their initial new move. Today was the third day. As far as I’m concerned forecasts have not changed; excessive moisture through near month’s end. If these forecasts are true the intra-day correction we saw today will probably be short lived. Implied volatility has increased noticeably on the rally so it is my idea not be scared off by corrections such as we saw today. Technical points to watch; July corn has a major downtrend line just above today’s highs as does the December contract. Take those out and the short covering should accelerate once more.
Daily Support & Resistance for 05/16
July Corn: $3.64 – $3.78
Dec Corn: $3.84 – $3.96
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.