Sept Corn closed 1 ¼ cents lower ($3.56 ½), Dec 1 ¼ cents lower ($3.70 ½) & March 1 ¼ cents lower ($3.82)
Sept Chgo Ethanol closed 0.004 cents a gallon higher ($1.353), Oct 0.002 cents lower ($1.350)
USDA announces 213.3 K T. of corn sold to Mexico – 142.2 K T. for 2018-19 – 71.1 K T. for 2019-20
Weekly Corn Export Inspections – 1.261 M T. vs. 800 K – 1.600 M T. expected
Weekly Corn Condition & Progress – 70% GE (-1%) vs. 70% expected vs. 62% year ago – Dough Stage – 73% vs. 56% 5-year average – Dented – 26% vs. 13% 5-year average
Flat price corn sees follow through selling Sunday night, early Monday. The day session brought us some minor buying in the form of short covering, bottom picking as well as some buying related to inter-market spreading (the liquidation of long wheat/short corn spreads). Helping out was the idea of another downgrade in the condition of the corn crop due to ongoing dryness in selected parts of the Corn Belt. Forecasts for the week have some decent looking moisture for the southwestern reaches of the Corn Belt as well as the middle southern sections and in the east. Rainfall in the north, northwestern reaches of the Corn Belt remain questionable. Despite the larger than expected supply from the USDA on Friday many in the trade are still with the belief that once the harvest glut is behind us prices will improve from better exports. Today’s weekly corn export inspections were deemed decent as they were middle of the road vs. expectations.
I’m told the logistical problems at Alton, IL have been solved. That in turn has some selected river locations that had been impacted by the snafu bumping up their respective basis levels. Overall, however, interior corn basis levels still have a defensive look to them. The Gulf remains nothing special but its basis trend is grinding higher. Corn spreads unchanged in the first three months and gained fractionally May forward to Dec 2019. Overall corn spreads remain wide in anticipation of a wall of corn coming at us in the next 8-10 weeks.
As far as I’m concerned the back of the recent bull run in corn has been broken as charts read clearly lower. $3.60 or so should be viewed as support while $3.80 has to be viewed as good resistance. Many feel this year will be different as it is expected the US producer will try and sell as much corn as he can to bankroll his cash flow. This is one reason why corn spreads are staying wide. What do we have to look forward to in the near term? The ProFarmer crop tour starts next week and he has a history of being the farmers’ friend. In other words his yield projections have a history of being light vs. the USDA. Charts tell me I’m supposed to be selling rallies.
Daily Support & Resistance for 08/14
Sept Corn: $3.53 – $3.60
Dec Corn: $3.67 – $3.74
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.