July Corn closed ¼ cent higher ($3.94 ½), Sept 1 cent higher ($4.03 ¾) & Dec 2 ¼ cents higher ($4.12 ¾)
June Chgo Ethanol closed $0.025 cents a gallon lower ($1.367) & July $0.023 cents lower ($1.377)
Weekly Ethanol Grind – 1.071 million bpd vs. 1.051 million week ago – Stocks – 23.4 million bbls vs. 22.3 million week ago
Weekly Corn Export Sales – old crop vs. 200-600 K T. expected – new crop vs. 50-450 K T. expected
Higher volatility along with further considerations of the suggested Market Facilitation Payment (MFP) program prompted a bit of profit taking Tuesday night, early Wednesday. Once the day session resumed continued short covering along with some new buying erased those losses. It seems focus has now moved to the new crop given what the intra-market corn spreads have done over the past two days; Tuesday morning they came in quite strong and by today’s close they went home rather weak. Weather forecasts for the near term continue to suggest too much moisture for a good portion of the Corn Belt. Some forecasters are willing to suggest the excessively wet bias will continue well into the first week of June. Other forecasters are hinting at the idea of some extended clearing by the middle to the end of next week but they do agree the overall wet pattern is not going to go way longer term. Prevent Plant dates come into focus next week. I’ve seen guesstimates ranging from 3 million acres to 10 million acres. Unfortunately we won’t have real accurate data until well into the growing season. Since we are in the throes of a weather market short term direction will continue to be dictated by the updated daily forecasts.
The interior corn basis continues to trade all over the place. The Ohio River continues to move higher, Lincoln, NE eases, Decatur, IL jumps higher, Cedar Rapids continues to ease, Toledo continues to trade back and forth between 4 under and 8 under, Seneca, IL (Illinois River location) eases, Davenport eases, Linden, IN firms and Council Bluffs continues to ease. Gulf corn continues to firm in anticipation of another round of “river” closings. Corn spreads have given most everything back that was gained on the flat price rally due to the upfront short covering. I’m told Brazil’s corn export program has started one month earlier than its norm. It should be noted that the 2019-20 corn crop is gaining on the 2020-21 corn crop.
July corn appears to be hesitant as it approaches last fall’s highs. Dec corn is matching the highs it attained last August. I have to think that as long as this year’s corn crop remains in question no one wants to be short; they want to be long. The recent hike in volatility will continue to give us waves of profit taking such as we saw last night. With this said as long as we have an unknown dips in price such as we saw last night will be bought. The “however” to the current weather market is the first time we see the suggestion that sustained clearing may be developing the corn market will take a hit. Until that time Eustis, until that time.
Daily Support & Resistance for 05/23
July Corn: $3.84 – $4.00
Dec Corn: $4.04 – $4.19
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