Corn Commentary


Corn – Just My Opinion

July Corn closed 16 cents higher ($4.20 ¼), Sept 17 cents higher ($4.29 ½) & Dec 17 ¼ cents higher ($4.37)

June Chgo Ethanol closed $0.084 cents a gallon higher ($1.481) & July $0.088 cents higher ($1.492)

Weekly Corn Export Inspections – 1.098 M T. vs. 600 K – 1.000 M T. expected – Cumulative 38.572 M T. vs. 58.42 M T. USDA target

Weekly Corn Crop Progress – Planted – 58% vs. 63% expected vs. 90% 5-year average – Emerged – 32% vs. 69% 5-year average

Flat price corn picks up where it left off on Friday; zooming higher. The story hasn’t changed; excessive moisture throughout the Corn Belt leading to ideas of lost acres due to the “prevent plant” program. In some areas of the Corn Belt the “prevent plant” date has come and gone. Producers in those areas now have to decide if they will still try and plant despite losing 1% per day off of their insurance program. The sharp price rally is making the decision difficult. Forecasts still call for excessive moisture this week before an attempt at clearing by week’s end. Some forecasts suggest an active weather pattern for much of the Midwest into the first full week of June and then some drier days. There is some discrepancy as to how much corn got planted last week as the range of guesses is 59% done to 68% done. Forecasts, both short term and longer term, will continue to dictate direction.

Interior cash corn markets have taken on a mixed look. River locations that can bypass the snarl at St. Louis are seeing stronger bids. Locations that can’t bypass that area retreat with their bids. I’m told that processors for ethanol have backed off on their bids. The Gulf remains strong due to the logistical problems on the riverways. During the Monday night rally spreads were strong; they eased considerably during the day session. Cash corn sales are happening where the corn has been planted and appears to be in okay shape.

Despite the 78 cent rally (July) the 14-day RSI does not read that extreme; 78.15. The Dec contract’s reading is 79.62. Daily stochastics will suggest overbought but stochastics have been known to extend both overbought and oversold. I have to use weekly charts to try and suggest the next levels of resistance. A weekly chart based off of the nearby looks at the low $4.40 area as the next level of resistance for July corn. There is, however, a gap at the $4.30 level on the July corn daily chart that was created last June when the market was starting to breakdown from its spring rally. A weekly continuation chart using Dec futures suggests the next level of resistance is the mid-low $4.50’s. These levels of resistance go back to 2015. The bottom line to these markets is the unknown that has been created by this springs weather conditions. As long as we have this unknown prices will be biased to move higher. Additionally; specs/funds are now net long with today’s activity.

Daily Support & Resistance for 05/29

July Corn: $4.10 ($4.04) – $4.30 ($4.37)  

Dec Corn: $4.26 ($4.20) – (?) $4.53

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.