July Corn closed 6 cents lower ($3.39 ¾), Sept 6 ¼ cents lower ($3.47 ¾) & Dec 6 ¼ cents lower ($3.60 ¾)
August Chgo Ethanol closed 0.008 cents a gallon lower ($1.425), Sept 0.008 cents lower ($1.427)
USDA announces 113.0 K T. of corn sold to Egypt (60.0 K T. old crop, 53.0 K T. new crop)
USDA announces cancellation of 152.0 K T. old crop sorghum sold to Mexico
CONAB – Brazilian corn crop 82.92 M T. (26.91+56.01) vs. 85.00 M T. (26.78+58.22) last month vs. USDA at 85.0 M T.
In a nutshell; new contract lows but not new contract low closes. Pressure came from the declining wheat prices, the unwinding of long feed grain/short oilseed inter-market spreads and benign looking forecasts for next week and beyond. It’s going to be hot with a dry bias through early next week but then forecasts suggest easing temps with better moisture. This year unlike the previous two years corn pollination has had to deal with hotter temps. Its impact on pollination won’t be known for weeks. The spec trade however is with the thought of successful pollination. Adding to the gloomy outlook are ideas of a bearish looking supply-demand report on Thursday. It’s a given that supply will rise in the US due to acreage increases. The demand side of the equation is a bit of an unknown. How will the USDA incorporate all of the tariffs on US exports that are currently flying around? The bottom line is it appears the trade is geared up for a bearish looking report. Are we setting ourselves up for a “sell the rumor – buy the fact” scenario?
The interior cash corn market has taken on a mixed look. River locations are both up and down depending upon location. Processors are standing in but not reaching for origination. The Gulf firms overnight. Upfront corn spreads ran steady on the day while bear spreads were working Dec forward.
New contract lows but not new contract low closes bolsters the idea that the corn market may move into a trading range affair for the near term. Longer term it will be up to the stocks-to-usage ratio and as of this writing it looks like the spec may be getting the cart ahead of the horse.
Daily Support & Resistance for 07/11
Sept Corn: $3.44 – $3.53
Dec Corn: $3.57 – $3.66
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.