July Corn closed 5 ¾ cents higher ($3.89), Sept 6 ¼ cents higher ($3.96 ¾) & Dec 6 ¼ cents higher ($4.04 ½)
June Chgo Ethanol closed $0.016 cents a gallon higher ($1.380) & July $0.015 cents higher ($1.388)
Weekly Corn Export Inspections – 820.9 K T. vs. 600 K – 1.000 M T. expected – 37.454 M T. year-to-date vs. 58.42 M T. Target
Weekly Corn Crop Progress – Planted – 49% vs. 50% expected vs. 80% 5-year average – Emerged – 19% vs. 49% 5-year average
It’s a new week for corn trading but the story hasn’t changed from last week; corn planting on a national level remains far behind the norm and is expected to stay that way for the coming week given current forecasts for excessive moisture throughout a large area of the Corn Belt. This has led to all sorts of talk about how many acres we could lose to “prevent plant” as well as how much of a downturn we could see for a national yield. As of this writing the “what ifs” are running rampant as to what kind of corn crop we could see if the current weather patterns persist.
The interior corn basis trades all over the place depending upon location. The Ohio River is up 9 cents, Burns Harbor up 2 cents, Cedar Rapids down 2 cents, Seneca, IL 1 cent better and Council Bluffs down 2 cents. The Gulf has a firmer bias when compared to last week’s postings. The riverways feeding to the Gulf reopened late last week. Given this past weekend’s rainfall coupled with this week’s forecasts for more excessive moisture I’m not sure just how long these reopened riverways will stay open. Early on corn spreads were quite strong but as they day went on they softened as cash movement against the old crop was probably the best we have seen in quite some time.
Anybody want to buy a 48 cent rally in July Corn; how about a 42 cent rally in December Corn? Common sense says NO. That’s the problem with supply scare rallies; they don’t always make sense because we really don’t know what we have. It’s the “unknown” that keeps supply scare rallies going. So is the corn market over bought? The 14-day RSI for July corn stands at 67.95 and for December 68.63. These are not overbought numbers. I will admit the shorter term inter-day charts do have a bit of overbought to them. That however can be remedied with an easier overnight session. The bottom line here is that the corn market will be prone to move yet even higher as long as the weather stays as such to inhibit corn planting. From a “chart” perspective July corn should run into problems at the $4.00 to $4.05 level and December $4.10 to $4.15. As far as tomorrow is concerned don’t be surprised to see an “up on Monday, down on Tuesday” scenario develop.
Daily Support & Resistance for 05/21
July Corn: $3.80 – $3.96
Dec Corn: $3.94 – $4.10
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.