Corn Commentary


Corn – Just My Opinion

July Corn closed 2 ½ cents higher ($4.34 ¼), Sept 2 ½ cents higher ($4.35) & Dec 2 ¼ cents higher ($4.39 ½)

August Chgo Ethanol closed $0.021 cents a gallon higher ($1.505) & Sept $0.023 cents higher ($1.513)

Weekly Ethanol Grind – 1.047 million bpd vs. 1.801 million bpd last week – Stocks – 23.0 million bbls vs. 22.8 million bbls last week

Weekly Corn Export Sales – old crop vs. 150-400 K T. expected – new crop – vs. 100-300 K T. expected

It was a two-sided trade on Wednesday as the market participants try and figure out what the Supply-Demand report may have in store for us.  We have a number of potential unknowns to deal with regarding tomorrow’s report. Will the WASDE people adopt NASS’s acreage data from last week or will they try to manipulate it due to the extremely irregular planting season? Will they leave the yield projections unchanged from last month? On top of all this we still have to deal with differing ideas on the upcoming weather scenarios; will we see beneficial rains next week. How widespread will they be; will they favor just the eastern Corn Belt? As far as the old crop data is concerned it is thought the old crop carryout should increase due to reductions in export as we have less than two months to ship 13.4 M T. to meet the most recent export target.

Interior cash corn markets remain quite strong; especially the eastern Corn Belt. The producer remains quite firm in his resolve not to sell anything until he has a better handle on his new crop. End-users are the ones paying up as evidenced by commercial firms dominating the July deliveries. The Gulf too has a firm tone as it has to compete with the interior demand.  Corn spreads continue to tighten led by the September contract.

Thursday brings us the USDA Supply-Demand update. I’m sure what they will have in store for us. If the trade wants to stay bullish I think from a price chart perspective Dec corn needs to hold the $4.45 – $4.20 level. To get beyond the mid-low $4.50’s (Dec) we will need to see friendly data on the supply-demand report as well as a bullish outlook on the weather forecasts. The NWS has been doing some flip-flopping with their moisture outlooks. With that said tomorrow’s early trade will take their cue from updated forecasts and then from 11:00 AM CDT we’ll trade whatever the USDA has to say on their supply-demand report. With that said keep your seatbelts fastened as the USDA is starting to get a reputation for throwing curve balls at us.

Daily Support & Resistance for 07/11

Sept Corn: $4.20 – $4.50  

Dec Corn: $4.25 – $4.55

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.