Corn Commentary


Corn – Just My Opinion

July Corn closed 17 ½ cents higher ($4.36 ¼), Sept 17 ¼ cents higher ($4.45 ¼) & Dec 16 ½ cents higher ($4.52 ¼)

June Chgo Ethanol closed $0.050 cents a gallon higher ($1.520) & July $0.061 cents higher ($1.542)

International Grains Council cuts US corn crop 9.0 M T. to 362.0 M T. – earlier this month the USDA pegged the US corn crop at 381.8 M T.

Weekly Corn Export Sales – old crop vs. 350-650 K T. expected – new crop vs. 100-200 K T. expected

Today’s activity, back towards yesterday’s highs, is a classic example of a weather market. It seems updated forecasts are not quite as dry as was thought on Wednesday. Wednesday’s forecasts had the trade thinking that US producers may try and push past the “prevent plant” dates in an effort to get their crop planted given the idea of clearing weather. Today’s updated forecast was not that clear. Today’s update talked about Illinois east staying soggy. The west is wet enough that even normal rain can be viewed as too much. Those in the weather business tend to follow two weather forecasting models; the American and the European. The American model is considered the flakiest meaning it changes rather often vs. the European model being known for its consistency. It’s the American model that seems to be flip-flopping on a near daily basis. As far as next Monday’s “planted” rates are concerned not much of an increase is expected. Come mid-June and we don’t have 80% of the intended corn crop planted the talk of “disaster” will be running rampant. For the near term the trade will continue to focus on each and every forecast update.

Not a lot of change is being noticed with Thursday’s interior cash corn basis. Processors show the best bids given ethanol’s sharp rally. River locations that are involved with the high water problems are not very aggressive in their attempts to originate corn. Surprisingly the Gulf eases a bit suggesting demand is not all that great. July led the rally as funds renewed building up their net long positions.

Nearby weekly corn charts are suggesting that if we can see a Friday close above $4.40 it would represent a 5 year breakout to the upside. The same can be said for a Dec corn weekly continuation chart if we see a Friday close above the mid-$4.50’s. Tomorrow is Friday and the end of the month; how good are your weather forecasting skills?

Daily Support & Resistance for 05/31

July Corn: $4.20 – $4.45 (?)  

Dec Corn: $4.35 – $4.60 (?)

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.