July Corn closed 5 cents lower ($4.49 ¾), Sept 6 cents lower ($4.55 ½) & Dec 5 ½ cents lower ($4.63)
July Chgo Ethanol closed $0.003 cents a gallon lower ($1.600) & August $0.003 lower ($1.606)
The corn market moves into a correction prompted by the unknown around just how many acres got planted vs. how many acres went into the prevent plant program. Yesterday afternoon the USDA reported corn planting at 92% completed. The question is 92% of what? As one person put it; if the producer plans on planting 1000 acres and half got planted and the other half went “PP” is he 50% planted or is he 100% done? This question will go unanswered for some time to come and that unknown has prompted some profit taking. There was also renewed talk of eastern ethanol producers importing SA corn. As of this writing SA corn is a bargain compared to US corn. The sharp correction in US wheat futures added to today’s run of profit taking. Weather for the near term is expected to stay wet mostly for the eastern Corn Belt. Some of the private forecasters are suggesting we may see a warmer and drier trend develop by sometime next week. The NWS goes along with the warmer conditions but still staying wet for much of the Corn Belt. The NWS 8-14 day forecast does have the Plains moving to warm and dry. Next Friday, the 28th, the USDA will report on Quarterly Stocks and Planted acres. Between now and then I think the corn market will go into a state of flux (consolidation).
Interior cash corn markets (basis) continue to show a firm tone. Cash movement is not all that great given the sharp rally. The Gulf continues to grind higher. Spreads were a bit erratic today; July gains on Sept and Dec. Dec loses to March forward.
Consolidation/correction here we come! I’m not looking for any great retracement but the day to day trade will stay somewhat volatile. Fade the short term extremes for short term trading opportunities – don’t get caught chasing these shorter term extremes.
Daily Support & Resistance for 06/19
July Corn: $4.38 – $4.54
Dec Corn: $4.52 – $4.67
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.