Dec Corn closed 7 ¼ cents lower ($3.61), March 7 cents lower ($3.73 ½) & July 6 ¾ cents lower ($3.87 ¼)
Nov Chgo Ethanol closes $0.017 cents a gallon lower ($1.260), Dec $0.016 cents lower ($1.277)
Weekly Corn Export Sales – 349.5 K T. old crop vs. 400-800 K T. expected – 28.0 K T. new crop vs. none expected
Take your choice for the sharp sell-off on Thursday; feeble export sales, rapid harvest, a strong US Dollar, corn usage for ethanol lagging the USDA pace and/or general pessimism around the entire US Ag complex. The bottom line continues to be the current pace of disappearance is not offsetting the supply. For what it is worth – the day of the October production report Dec corn’s low was $3.60 ¼ and the report was deemed friendly. Today’s low was $3.60 ½ – take out that October 11th low and it would suggest the rally that occurred after the crop report was nothing but a head fake.
The recent improvement in some of the interior cash corn markets is beginning to recede. I have to think its all about the ongoing pace of harvest and the current lack of offsetting demand. The Gulf is stable at best at recent lows. Spreads continue to widen. We are currently looking at the perfect storm – sloppy looking cash markets, widening spreads and an ugly looking flat price.
As I mentioned earlier if we take out and close below the Oct 11th low things will stay ugly looking. How ugly could it get – how about a challenge of the mid to low $3.50’s?
Daily Support & Resistance for 10/26
Dec Corn: $3.59 ($3.54) – $3.66
March Corn: $3.71 ($3.66) – $3.78
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.