Sept Corn closed 11 cents lower ($4.00 ¼), Dec 11 cents lower ($4.10) & March 10 ½ cents lower ($4.20 ½)
August Chgo Ethanol closed $0.019 cents a gallon lower ($1.449) & Sept $0.027 cents lower ($1.455)
Weekly Corn Export Sales – Old crop vs. 150-400 K T. expected – New crop vs. 150-450 K T. expected
Dec corn moves through the suspected $4.20 support level in a very decisive manner. I did not see a particular news item to prompt this break. If I didn’t know better it was the end of the month flush as the remaining fund/speculator longs threw in the towel. We did see some rain out west favoring eastern Nebraska, western Iowa and the northern reaches of Missouri. This system is expected to dissipate as it moves toward the Mississippi River. Forecasts going forward do show any thing threatening. This would suggest the corn that is currently going through pollination or about to pollinate will be fairly successful. All we have to do now is figure out just how much corn do we have out there. Hopefully we’ll get a decent answer to that from the USDA on the 12th. Lagging export demand as well as lagging domestic demand will continue to inhibit rally attempts.
Corn processors continue to show a defensive look with their basis levels. It’s not about so much big movement it’s about poor processing margins. After recent sell-offs the interior river basis is trying to show signs of stabilizing. The Gulf continues to be nothing special. Corn spreads ran unchanged in the Sept/Dec but fell off going forward especially the year-to-year spreads which is a function of the overall liquidation.
For what it is worth the Fibo retracement, 61.8%, of the entire Dec corn rally comes in around the $4.05 ½ level. All short term technical data went home with a fair degree of oversold. Daily momentum indicators are finally getting to an oversold state. The 14-day RSI sits at 35.22 which is not oversold. If today was a month end dump I have to think we may not see much more downside in the near term.
Daily Support & Resistance for 08/01
Sept Corn: $3.95 ½ – $4.06 ½
Dec Corn: $4.05 – $4.16
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