Sept Corn closed 1 ½ cents lower ($3.57), Dec 2 cents lower ($3.66 ¼) & March 2 ¾ cents lower ($3.77 ¾)
Sept Chgo Ethanol closed unchanged ($1.295) & Oct $0.008 cents a gallon higher ($1.322)
An improvement in crop conditions and no frost in the forecasts (albeit cooler than normal) has flat price corn staying depressed looking. Last week’s low for Dec corn was $3.65 ½, today’s low was $3.65 ¾. The contract low for Dec corn is $3.63 ¾ made on May 13th. US origin for export remains uncompetitive as SA origin beats us hands down. I’m now told Black Sea origin is also at a discount to the US. Overall it was a slow volume day for the flat price trade. If there was a feature to today’s trade it was happening in the nearby spread, Sept/Dec, as we draw closer to 1st notice day on Friday. Volume appeared rather large in the spread. Because we really don’t have any early corn in the Midwest and the possibility of an early end to the growing season exists I question the amount of deliveries we will see on 1st notice day.
The interior corn basis ran steady to better on Tuesday. Cedar Rapids improves its basis by 3 cents and Mid-Miss locations were also showing improvements. Overall corn movement remains rather slow. The Gulf, however, reads lower with its midday posting. I have to think the Gulf is reflecting its lack of competitiveness in the World export markets. Spreads were firm out to May 2020 and then slacked off from there.
Growing up in the industry there used to be an adage to not chase a quiet market when prices appear to be in an extreme. I know this adage works quite well when a market is on an extreme to the upside but when on the downside not so well. When a market is rallying the bull needs to be fed every day. When a market is moving south just a lack of news will keep it moving south. Sure, we have some “what ifs” out there in regards to weather but until they come to the forefront that all they are; just “what ifs”. I have to think the sideways to easier grind will continue for the next couple of days and then some short covering into the 3-day weekend.
Daily Support & Resistance for 08/28
Dec Corn: $3.63 – $3.70
March Corn: $3.75 – $3.82
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