Corn Commentary


Corn – Just My Opinion

Sept Corn closed 13 ¼ cents lower ($4.41), Dec 12 ¼ cents lower ($4.47) & March 11 ¼ cents lower ($4.53 ¾)

August Chgo Ethanol closed $0.036 cents a gallon lower ($1.558) & Sept $0.027 cents lower ($1.575)

Weekly Corn Export Inspections – 676.4 K T. vs. 500-800 K T. expected

Weekly Corn Condition & Progress – 58% GE vs. 56% expected vs. 72% year ago – Silking – 17% vs. 42% 5-year average

Welcome to the wonderful world of weather (and volatility)!!! Sunday night’s gap higher was based on recent heat and dryness. The daytime break came from forecasts calling for moisture this week favoring the eastern Corn Belt. This moisture is the remnants of the tropical storm that hit the Gulf over the weekend. As of this writing this moisture is not expected to get into Iowa and points west. Temps will heat up again once this system moves through. Temperature forecasts, however, are slated to see a break in the heat come next week. Adding to the break was the idea of a short term overbought (inter-day charts, not daily charts) as well as the funds/specs being sizable longs after last week’s rally. For what it is worth corn export inspections were deemed no big deal.

Interior cash corn locations read steady to easier. The locations that are reading easier are touting modest amounts of producer movement and most of that occurred over the weekend and with the Sunday night higher markets. Many areas, especially in the eastern Corn Belts, were reporting cash corn prices, prior to today’s break, in excess of $5.00. the Gulf too has eased with the movement as well as the interruption at the Gulf from the weekend storm not being as bad as originally anticipated. On the final days of the July delivery process it was noted Cargill redelivered most of the corn they had stopped and ADM took it in. Corn spreads were under pressure as soon as the flat price started slipping.

As far as I’m concerned today starts the beginning of a trading range affair and should last up until August 12th when the USDA will update production ideas along with new acreage projections. Day-to-day forecast changes will most probably dictate short term directions up until then. I’m willing to say the highs we saw Sunday night will be the topside and something closer to $4.20 the downside (December). $4.20 may sound extreme to those who think the USDA is way off base with their most recent acreage ideas but with the increase in volatility the daily swings should remain wide; get used to it.

Daily Support & Resistance for 07/16

Sept Corn: $4.34 – $4.50  

Dec Corn: $4.40 – $4.56

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.