July Corn closed 6 cents lower ($3.45 ¾), Sept 6 ¼ cents lower ($3.54) & Dec 6 cents lower ($3.67)
August Chgo Ethanol closed 0.006 cents a gallon lower ($1.433), Sept 0.006 cents lower ($1.435)
Weekly Corn Export Inspections – 1.446 M T. vs. 850 K – 1.600 M T. expected
Weekly US Corn Conditions & Progress – 75% GE (-1%) vs. 75% expected vs. 65% year ago – Silking – 37% vs. 18% year ago vs. 18% 5-year average
Today was the 6th Monday (beginning of the week) in a row for lower corn prices. Stout looking export inspections were offset by the idea of good corn crop ratings. We are also dealing with the idea of bearish USDA data on Thursday’s supply-demand update. The USDA will incorporate higher acres from June 29th but I do believe they will leave the current 174.0 bpa unchanged for now. That would suggest a production increase of 187 million bu. It will be interesting to see how the USDA incorporates the ongoing NAFTA dispute into the demand equation. Trade estimates have the corn carryout increasing by 135 million bu. I don’t believe the Chinese tariffs will have much impact on the US corn demand as China is only slated to import 5.0 M T. of corn this coming year. Last year their best supplier was Ukraine (then again Ukraine is reportedly having problems with this year’s crop). The $64 K question for global corn carryout – can decreases elsewhere in the World offset increases in US production?
What changes that are being seen with the interior corn basis are lower quotes. Processors show the best basis levels but then again they are doing little for the market. The Gulf has been easing since mid last week. Sept forward corn spreads continue to inch wider. Spreads adding additional carry to the price structure is not friendly.
For as ugly as the corn trade was on Monday it was just an inside day of Friday. If one is trying to have a positive approach to the corn market you’ll want to see the development of a trading range affair between $3.60 and $3.80 (Dec). As much as I would like to think the trade is getting too short I have a hard time finding a rationale to dispute them. So what’s it going to take turn things around – how about continued lower crop ratings? Lower crop ratings right now is the only offset that I can see that would help offset Thursday’s higher production data.
Daily Support & Resistance for 07/10
Sept Corn: $3.46 ½ – $3.60
Dec Corn: $3.58 ½ – $3.74
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