Corn Commentary


Corn – Just My Opinion

July Corn closed unchanged ($4.15 ¾), Sept ¼ cent lower ($4.24) & Dec ¾ cent higher ($4.34 ½)

July Chgo Ethanol closed $0.009 cents a gallon lower ($1.473) & August $0.008 cents a gallon lower ($1.473)

Weekly Corn Export Inspections – 850.6 K T. vs. 500-900 K T. expected

Weekly Corn Crop Progress & Condition Report – Planted – 83% vs. 83% expected vs. 99% 5-year average – Emerged – 62% vs. 93% 5-year average – Condition – 59% GE vs. 54% expected vs. 77% year ago

For all practical purposes corn planting is mostly done; meaning the US producer is conceding it is probably too late to try and plant anymore. So the question now becomes how many acres will be enrolled in the “prevent plant” program? Will it be 6 million, 8 million maybe 10 million? Unfortunately we won’t know for some time to come. The FSA won’t start releasing its computations until August. Will the USDA have a special acreage report for us in July after its June 28th report? Supposedly the June 28th report is compiled during the first two weeks of June. What about the condition of the crop? Since this is the first report of the season this afternoon it’s really not indicative of what we could see going forward. Let’s talk about this in mid-July. Today’s bottomline is that the trade wants to be long due to the probability of lost acres as well yield loss. Will the USDA try to confirm some of this on tomorrow’s Supply-Demand update?

Compared to one week ago any corn basis location not tied to the riverways is showing us higher basis levels. The producer is not willing to sell any more cash corn, old crop or new crop, until he has a better idea of what he might have or not have as to his new crop. I’m told the Gulf basis is markedly higher but I did not see it on the midday update. The old crop/new crop corn spreads saw some noticeable easing. The “big boy” index fund is ongoing so that could be just some of that spread action.

Corn charts for the short term are suggesting consolidation. Longer term still shows the possibility of a topping formation. For the topping formation to be confirmed we need to see closes below last week’s lows. For those of you with the longer term bullish persuasion we need to see weekly closes above the recent highs to confirm that this idea remains intact.

Daily Support & Resistance for 06/11

July Corn: $4.05 – $4.30  

Dec Corn: $4.25 – $4.48

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.