Corn Commentary

storck

Corn – Just My Opinion

July Corn closed 12 ¾ cents lower ($3.37 ½), Sept 12 ½ cents lower ($3.47) & Dec 12 ¼ cents lower ($3.59)

July Chgo Ethanol closed 0.022 cents a gallon lower ($1.403), August 0.042 cents lower ($1.393)

Weekly Corn Export Inspections – 1.537 M T. vs. 900 k – 1.600 M T. expected

Weekly Corn Crop Ratings & Progress – 76% GE (-1%) vs. 76% expected vs. 68% year ago – Silking – 17% vs. 9% year ago vs. 8% 5-year average

Surprise, surprise; it was another “blue” Monday for the corn market. New contract lows and closes were seen all the way out to May 2019. The deferred months all challenged recent lows while scoring new contract low closes. The rationale for the bearishness are numerous; last Friday’s 1.1 million acre increase, the notion of good growing conditions on a national level (you’ll always find some holes where conditions are suffering due to either excessive moisture or too dry), mixed forecasts (a bias to hot & dry in the west and warm and wet in the east) and last but not least trade/tariff fears. Adding to the existing bearishness could be the USDA on its next supply-demand update. They may try to incorporate the effects of tariff enactment if the government goes ahead with their plans for the 6th.  Based on the recent acreage adjustment production will come in 180-190 million bu. higher and that’s using 174.0 bpa.  Demand could be dropped depending what the government does on the 6th.

The interior corn basis levels reads mostly steady with processors a touch better. Movement is nothing to write home about and spreads continue with their widening bias. Weekly export inspections were very good once again but the market action/spread action is telling us we have the supply to meet the demand.

I’m not sure the price action can get any worse but I can’t find much out there to change the bearish attitudes.  The trade is looking for a very slight downgrade in conditions tonight.  It will take a radical downgrade to turn the tide.  Weekly charts, based off of the nearby July, show a low at $3.28 ½ made in the first week of September 2017. After that we look at the Sept 2016 low of $3.01. If you’re looking for an RSI reading to suggest oversold the Dec contract sits at 26.28.  Be careful of bounces overnight only to fail during Tuesday’s day session as that has been the market’s MO of late.

Daily Support & Resistance for 07/03

Sept Corn: ??? – $3.55  

Dec Corn: ??? – $3.67                   

 

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