Sept Corn closed ¾ cent higher ($4.36), Dec ¼ cent higher ($4.41 ½) & March ¼ cent higher ($4.48 ¾)
August Chgo Ethanol closed $0.043 cents a gallon lower ($1.478) & Sept $0.043 cents lower ($1.495)
Weekly Ethanol Grind – 1.066 million bpd vs. 1.047 million bpd last week – Stocks – 23.4 million bbls vs. 23.0 million bbls last week
Weekly Corn Export Sales – old crop vs. 250-500 K T. expected – new crop vs. 100-300 K T. expected
Tuesday night brought us quietly easier prices with relatively light volume. Early Wednesday prices rallied back to Tuesday highs prompted by the following that was posted on a popular Ag website – PP Acres: ProFarmer article says RMA has a running tally of PP for all acres at 12.5 mln with final amounts expected to increase. “Usually reliable sources detail PP acres for corn as of early July were 7 to 8 mln acres, while beans were 2 to 3 mln acres”. USDA undersecretary Bill Northey earlier said total PP acres would likely go over 10 mln acres, and that appears to be the case based on internal USDA numbers. The rally failed to hold as the day progressed citing beneficial weather for the developing crop. Yes, it’s going to get quite hot over the few days but forecasters suggest cooling next week but with limited moisture. The aforementioned acreage concerns/questions will be with us right up to the August 12th report but for the time being we are in a liquidation mode as specs/funds liquidate on the disappointing price action. For what it is worth – every broadcast/report that I have heard from anyone that has done an aerial survey over the Midwest suggests the USDA is badly mistaken with the June 28th acreage estimates. They cite too many holes in the fields that were planted as well as many fields that weren’t planted. This all may be true in the end but for the time being the funds are in control and they are liquidating based on the poor technical price action.
Most interior cash corn markets (basis) are showing a steady to higher bias. The recent break in the futures market has shut down any new cash selling. The Gulf shows a bit of easiness as well. Spreads within the 2019-20 crop year showed fractional improvement. Spreads involving the year to year spreads (2019/20 vs. 2020/21) were notably softer suggesting further evidence of the ongoing liquidation mode.
So – how much more liquidation do we see before prices show better evidence of consolidation. Prior to today I’m showing funds have sold 44 K contracts of corn since Monday. I have to think funds will continue to have a liquidating bias until we can show price action that shows some ability to hold a rally. Closes over $4.47-$4.48 would be a step in the right direction.
Daily Support & Resistance for 07/18
Sept Corn: $4.25 – $4.45
Dec Corn: $4.30 – $4.50
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