March Corn closed 6 ½ cents lower ($3.75 ¼), July 6 ½ cents lower ($3.90 ¼) & Dec 5 ¾ cents lower ($3.96 ¾)
Jan Chgo Ethanol closes 0.019 cents a gallon lower ($1.229) & Feb 0.016 cents lower ($1.259)
Weekly Corn Export Sales – 1.974 M T. old crop vs. 1.800-2.300 M T. expected – 542.6 K T. new crop vs. 500-600 K T. expected
USDA announces 373.4 K T. old crop corn sold to Mexico, 53.3 K T. new crop corn sold to Mexico
Flat price corn finally breaks out of its 13 day old trading range affair – dramatically to the downside. Weekly export sales were deemed solid based on expectations; some of the best to date. Additionally the USDA announces additional sales to Mexico (where would the US corn export program be without Mexico?). I think one of the catalysts for the downside breakout was the lack of any Chinese buying. We already knew the corn market was loaded with spec longs and they hadn’t been making any money. I was surprised to see the sharply lower US Dollar not offering anything to temper today’s sharp break.
The interior cash corn market (basis) runs mixed to lower. The Ohio River comes in lower and the Illinois River is mixed. Processor bids run mixed; Cedar Rapids easier and Council Bluffs a bit better. The Gulf runs steady with last night’s posting which was a bit easier vs. Wednesday’s posting. Corn spreads run steady to fractionally easier up front while old crop loses to the new crop. The overall trend in corn spreads is still widening (more carry in the price structure).
Flat price corn collapses through its Nov 30th to Dec 3rd gap like it wasn’t even there. We know the spec had been loading up on longs during the past 2 ½ weeks. After today’s close very few of those longs have any profit to speak of. Given the severity of today’s break I would think the flat price should try and realize some temporary support in the mid-low $3.70’s (March). That also coincides with some trendline support dating back mid-September. If March corn closes the week below $3.72 ¾ the mid-$3.60’s would become the next downside target. Resistance should be sound for a while up against the low $3.80’s.
Daily Support & Resistance for 12/21
Mch Corn: $3.73 ½ – $3.80
July Corn: $3.88 ½ – $3.95
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.