July Corn closed 4 ½ cents higher ($4.38 ½), Sept ¾ cent higher ($4.39 ½) & Dec 1 ½ cents higher ($4.43 ¾)
August Chgo Ethanol closed $0.010 cents a gallon lower ($1.521) & Sept $0.007 cents lower ($1.526)
Weekly Corn Condition & Progress – 57% GE (+1%) vs. 57% expected vs. 75% year ago – Emerged – 98% vs. 100% 5-year average – Silking – 8% vs. 22% 5-year average
The corn market saw a fair amount of “push-pull” on Monday. Sunday started with a gap higher due to forecasts suggesting the possibility of “hot & dry” scenario developing for the latter half of July. Some of this was offset with tropical activity developing in the Gulf of Mexico. Forecasters, as of this writing, are not sure what direction it would take once it hits the Gulf coast. Crop conditions are expected to show some improvement tonight. Progress, however, will act as a reminder of just how late the crop is. Late last week there was some talk of a possibility we might have an early frost. On Thursday the USDA will update supply-demand. Many believe the old crop carryout will be increased due to the slow pace of exports. With today’s export inspections shipments are at 42.462 M T. vs. the target of 55.88 M T. If we are to hit that target 13.4 M T. of corn will have to be shipped in the last 7-8 weeks of the marketing year. As of this writing that does not appear too likely. Last not but not least, few in the trade want to believe the acreage number that was released by the USDA on the 28th. Unfortunately for them it is thought that WASDE will have to use that acreage figure. The wild card will be what they use for harvested acres. It is my opinion they will continue to use last month’s 166.0 bpa yield.
The interior cash corn market turned in a mixed performance on Monday. Burns Harbor jumps their basis 10 cents. Decatur, IL backs off their basis by 7 cents after raising it 15 cents last week. Cedar Rapids eases by 2 cents after increasing 5 cents late last week. River basis levels ran mostly unchanged as fewer and fewer locations are dealing with recent logistical issues. Basis bids at the gulf are steady while offers increase. Corn spreads saw Sept losing to Dec and March while Dec and March gain May and July. The 2019-20 crop year gains on the 2020-21 crop year. For what it is worth the soon to expire July (this Friday) is enjoying a good old fashioned delivery squeeze as a prominent central Illinois processor has become a primary stopper.
I have to be honest here; I’m surprised at the extent of the retracement of the June 28th break. I have to think that the $4.50-$4.55 (Dec) will act as major resistance until more is known about the crop size. Given the “push-pull” we had to deal with today and the thought we are going to be dealing with this same type of scenario going forward it would not surprise me a trading range develop between the mid-$4.50’s on the topside and $4.20 on the downside. You ask “for how long will we be range bound; minimally until the 2nd week of August”.
Daily Support & Resistance for 07/09
Sept Corn: $4.30 – $4.45 ($4.50)
Dec Corn: $4.35 – $4.51 ($4.56)
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