July Corn closed 9 cents higher ($4.50), Sept 8 ½ cents higher ($4.54 ¾) & Dec 7 ¾ cents higher ($4.61)
July Chgo Ethanol closed $0.029 cents a gallon higher ($1.592) & August $0.025 higher ($1.598)
Weekly Corn Export Sales – 38.4 K T. old crop vs. 100-400 K T. expected – 360.8 K T. new crop vs. 200-500 K T. expected
USDA announces 122.0 K T. of corn sold to Mexico – 52.0 K T. old crop, 70.0 K T. new crop
Flat price corn finds support and rallies hard from the Thursday night lows. Excessively wet forecasts for a good part of the Corn Belt over the next 3-5 days, I feel, was responsible. Weekly export sales were dismal (that’s being kind) for old crop corn and just so-so for new crop. Then again the rally has not been about demand but rather the unknown around new crop supply. The acreage question will continue to haunt this market at least until early August when the FSA gives us their first look at how many acres went under the prevent plant program. Next Friday the USDA will update “planted acres” but I doubt it will tell the whole story. By mid-late next week forecasters are suggesting a good portion of the Corn Belt will see more seasonal temps and moisture won’t be as excessive. I can’t imagine Monday afternoon’s corn crop condition report will look all that spiffy. Yesterday I listened to an interview involving a prominent person with the USDA explaining what the “planting progress” numbers mean. He basically said it has nothing to do with acres planted but rather how far along the producer was with his planting intentions. With that said the acreage question remains up in the air.
Interior corn basis levels have taken on a mixed look from being firm across the Board. The Ohio River is down sharply due to loading problems from renewed high water issues. Spots along the Illinois River had been trying to firm recently but now once again they are dealing with high water issues. The processor continues to stand in as ethanol prices have resumed their uptrend thanks to sharply higher crude/gas prices. The midday Gulf postings are noticeably easier. Is this in response to the dismal weekly corn export sales? Corn spreads had an easier bias early but as the flat price firmed so did the spreads. Tomorrow is July option expiration – expect some erratic price in the July futures contract late in the day.
I couldn’t help but notice flat price finding support at its half way back levels from the interim low on June 6th to the high on June 17th. July corn came within 7/8 of cent of its 50% retracement ($4.35 5/8) and Dec corn hit it exactly ($4.49). I’m not sure the market is ready to resume its rally to new highs but for sure the trade will stay volatile. Improving crop development weather later next week may act as an inhibiting factor but the unknown around acres will stem any attempt at a sharp sustaining sell-off.
Daily Support & Resistance for 06/21
July Corn: $4.42 – $4.59
Dec Corn: $4.55 – $4.69
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