July Corn closed 1 ½ cents higher ($4.13 ½), Sept 3 ½ cents higher ($4.19) & Dec 3 ½ cents higher ($4.26)
July Chgo Ethanol closed unchanged ($1.483) & August $0.004 cents a gallon higher ($1.502)
So far Dec corn minds the Memorial Day weekend gap at $4.20. This level was attacked a number of times early in the day session but manages to hold despite sinking wheat and soy prices. I have to think this goes back to the disbelief with the USDA’s acreage data from Friday. Unfortunately we are going to have to deal with this for a number of weeks to come. I’m told the July 11th Supply-Demand report will have to use the latest acreage data. It will be interesting to see if WASDE continues to use the June yield of 166.0 bpa. If so it would suggest a crop size of about 13.852 billion bu. If I add in a slightly lower carryin and use the same demand numbers from June it would suggest a carryout of about 1.750 billion bu.
Interior cash corn markets, in most instances appear to be firmer. The break in the market has pretty much shut off any cash corn that may have been willing to move prior to the recent break in the futures market. The Gulf has clearly moved lower not that the river appears to be flowing freely. Sept to Dec ran unchanged on the day while spreads showed a firming bias out to July of 2020. It is noted that the 2019-20 crop year months lose to the 2020-21 crop year months.
So we hold the Memorial Day weekend gap but I’m not totally enthused with the resulting bounce; had a bit of a “dead cat” look to it. As I mentioned earlier I believe next week’s Supply-Demand update will have a bit of a bearish look. I’m thinking for the near term we could go into a consolidation phase that may feature some minor upside retracement. I don’t believe we are going to totally reject Friday’s USDA data and completely retrace its break. I do think the next challenge of the Memorial Day weekend gap will have it falling by the wayside but we still have some technical points to watch; the 50% retracement level of $4.18 3/8th’s followed by the 62% retracement down towards $4.05.
Daily Support & Resistance for 07/03
Sept Corn: $4.13 ($4.08) – $4.25
Dec Corn: $4.20 ($4.15) – $4.32
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