July Corn closed 8 ¾ cents lower ($4.41), Sept 9 ¼ cents lower ($4.46 ¼) & Dec 9 ¾ cents lower ($4.53 ¼)
July Chgo Ethanol closed $0.037 cents a gallon lower ($1.563) & August $0.033 lower ($1.573)
Weekly Corn Export Sales – old crop vs. 100-400 K T. expected – new crop vs. 200-500 K T. expected
The “johnny-come-lately” longs appear to be liquidating. A bull market needs to be fed almost daily. US corn is overpriced in the World market as evidenced by S. Korea buying feed wheat vs. corn; the price of the feed wheat is nearly $20 a ton cheaper. Many forecasters are trying to suggest that by the end of next week we will see much better crop developing weather. The latest from the NWS appears to be coming around to this idea. The issue around acres, however, will remain up in the air for some time to come. At the end of next week the USDA will report on old crop quarterly stocks and planted acreage as of June 1st. The old crop quarterly stocks will be some sort of a big number. I do believe the planted acreage update will show some decreases but I’m not sure it will tell the whole story.
The interior corn basis continues to firm. This holds true for most all locations especially now that many areas of the interior rivers are reopening. The Gulf continues to hold its own not giving back much of its recent strength. Corn spreads are very interesting; July gains on Sept and Dec while Dec loses to the March forward contracts. July option expiration is this Friday; this and earlier end-user fears that the eastern Corn Belt could run way short of corn for the coming marketing year is some of the rationale for the recent spread action.
Flat price corn retraces back down to old resistance levels. One of the older rules in technical trading 101 is that once resistance is violated it now becomes support. Sure, we could retrace deeper given the higher volatility but I have to think that much lower prices from today’s lows will not last very long. As long as volatility remains relatively high we have to get used the wider daily ranges.
Daily Support & Resistance for 06/20
July Corn: $4.36 – $4.48
Dec Corn: $4.48 – $4.60
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