Sept Corn closed ¼ cent lower ($3.70 ¾), Dec ¾ cent lower ($3.84 ½) & March 1 cent lower ($3.96 ½)
Sept Chgo Ethanol closed 0.013 cents a gallon lower ($1.421), Oct 0.013 cents lower ($1.415)
USDA announces 179.0 K T. optional origin new crop corn sold to Unknown
On Monday it seemed the corn market was caught between a surging higher wheat market and a sagging soybean market; in the end corn favored wheat but not by much. Tuesday brought us a similar but slightly different scenario where corn is once again caught between wheat and soybeans. Tuesday’s difference was sagging wheat prices vs. higher soybean prices; in the end corn favored the sagging wheat price but not by much. I did not see a lot of new news; just the optional origin sale announced by the USDA. There are still weather worries associated with the developing crops in Europe and the Black Sea area. The news wires’ trader surveys are now public (see attached file for the full rundown). What I found most interesting with the corn trade on Tuesday was the bull spreading involving the Sept contract. I have to wonder if this is in response to the announced opening of the logistical jam-up at Alton, IL by the end of the week.
I see no changes with the interior corn basis. The majority of the locations that I track are still showing a defensive posture. In my opinion the Gulf continues to be nothing special. Despite what appears to be defensive basis levels Sept corn gained noticeably on the forward spreads. Dec forward spreads saw little change on the day.
Flat price corn challenges the interim highs made last week and gets turned back. I would be hesitant to call it a significant reversal. I think we just saw some minor long profit taking that was prompted when the wheat market sold off. Going forward to Friday I still think we’ll see a consolidating type trade not straying too far from current levels.
Daily Support & Resistance for 08/08
Sept Corn: $3.64 – $3.74
Dec Corn: $3.78 – $3.88
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.