Corn Commentary


Corn – Just My Opinion

July Corn closed 5 ¾ cents higher ($4.20 ½), Sept 5 ¼ cents higher ($4.29 ½) & Dec 5 cents higher ($4.38 ½)

July Chgo Ethanol closed $0.010 cents a gallon higher ($1.488) & August $0.010 cents a gallon lower ($1.487)

Weekly Corn Export Sales – -8.8 K T. old crop vs. 500-800 K T. expected – 23.5 K T. new crop vs. 50-250 K T. expected

Today’s higher close had absolutely nothing to do with the weekly export sales report as calling them pathetic would be kind. The early break came from the idea that where possible corn farmers are continuing to plant beyond the “prevent plant” date. The rally came from ideas of a short term oversold and rallying wheat prices (that’s why I’m calling wheat the new leader in the clubhouse). Forecasts continue to call for relatively clear weather for the northern half of the Midwest through the coming weekend. The southern half of the Corn Belt will continue to be dealing with near to excessive moisture. I’m told that after this weekend rains do return to a good part of the Midwest but nowhere near the intensity that we saw during the month of May. Next Tuesday the USDA will update supply-demand. Supply-Demand reports do feature production data but is my opinion changes to acres, yield and production will be minimal as the big acreage report is due at month’s end. The “however” is that the news wire trader polls are suggesting the USDA will drop production by nearly 800 million bu. on this report and will feature a 3.6 bpa in yield. For what it is worth the UN’s FAO (Food and Agriculture Organization) is suggesting the US corn crop will be 10% less that last year. That would equate to a crop size of 12.978 billion bu.

The only change I’m seeing in the interior cash corn basis is the Ohio River; up another 2 cents, up 7 cents on the week. The processor continues to stand in, reaching higher at some locations. The Gulf, however, eases on slow demand as outlined in the weekly sales report.  It seems the US producer has become firm in resolve not to sell any more cash corn until he fully understands what he may have growing as well as what he may get if he opted for the “prevent plant”. Earlier this week it was announced the possibility of additional revenue under that program. Corn spreads ran mixed on the day; July gains on Sept, Dec, March and May and the 2019-20 crop year gains on the 2020-21 crop year. The “big boy” index fund roll starts to tomorrow but with the underlining bullish fervor I’m not sure its impact will be noticeable.

In the world’s subway systems there is an adage “mind the gap”. Today’s early break in the corn market did just that as July corn got into its May 24th to May 28th gap, $4.04 ¾ to $4.07 1/2. It did not fill the gap as the day’s low was only $4.07. Dec corn came close to threatening the topside of its gap, $4.22 ½. The day’s low was $4.25. As far as I’m concerned corn price charts still have a bearish look to them. Those of the bullish persuasion will say we are in the process of setting up a new consolidation phase at these new high levels prior to moving beyond the highs seen last week, earlier this week.

Daily Support & Resistance for 06/07

July Corn: $4.10 – $4.30  

Dec Corn: $4.28 – $4.48

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