Corn Commentary

storck

Corn – Just My Opinion

March Corn closed 1 ¾ cents lower ($3.77), July 1 ¾ cents lower ($3.93 ½) & Dec 1 ½ cents lower ($4.00 ¾)

February Chgo Ethanol closes 0.009 cents a gallon lower ($1.261) & March 0.008 cents lower ($1.278)

Weekly Ethanol Grind – 1.031 million bpd vs. 1.051 million bpd previous week – Stocks – 23.5 million bbls vs. 23.4 million bbls previous week

Recent Estimates for 2019-20 Corn Acreage – 91.5 million (Informa), 90.3 million (Farm Futures) vs. 89.1 million 2018-19 (USDA)

Comments from the Secretary of Commerce creates confusion; the US and China are miles and miles apart – 4 minutes later he says there is a fair chance China and the US will get to a trade deal. These comments prompted an easier trade for the majority of the day. The price action in the corn market basically mirrored the easier trade in the rest of the feed grain sector. Going forward the trade will continually try to assess the US supply-demand corn balance sheets in lieu of the governments absence. If you recall that if we had a January updated production, supply-demand report the trade was looking for not only lower US corn production but a lower carryout as well. In addition the trade will continue to monitor growing conditions is Brazil relating to its second season corn crop which is in the early stages of getting planted. Lastly it is my thought the corn market will sustain a minimally steady bias, if not higher, going into the scheduled trade meetings between China and the US at the end of next week. Many are with the frame of mind that China will minimally do some “token” buying of US corn ahead of these meetings as a gesture of good faith.

The interior cash corn market reads steady to higher. Cash corn movement remains nothing special as most are waiting to see what comes out of the US/China trade talks; just like the futures traders. The Gulf shows a grinding higher bias with its basis. Unfortunately corn spreads do not show a similar steady to higher bias as most corn spreads show a steady to easier bias. This suggests to me that whatever corn business we are seeing the pipeline has enough supply to handle it.

I’m not sure the price action in the corn futures’ market can get much more sideways. The overall pattern, beginning back in August, September, shows a steady progression of higher lows and lower highs. Just how tight this coiling action can get remains to be seen but when it pops the move could be substantial and fast; 20 cents in either direction. For what it is worth my speculative bias is higher.     

Daily Support & Resistance for 01/25

Mch Corn: $3.74 – $3.81 July Corn: $3.90 – $3.97                   

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.