March Corn closed 4 cents higher ($3.79 ¾), July 3 ¾ cents higher ($3.94 ¾) & Dec 2 ¾ cents higher ($4.01)
Jan Chgo Ethanol closes 0.008 cents a gallon higher ($1.274) & Feb 0.005 cents higher ($1.281)
Flat price corn moves higher on Thursday spurred on by continuing talk that China is looking at US offers. A noticeably lower US Dollar vs. Wednesday’s rally aided the rally. I don’t know if China is going to buy any US corn but if they do I can’t imagine it would be more than a token amount. If November’s higher Chinese production and stocks data was indeed a smokescreen the ongoing African Swine Fever (AFS) has surely reduced their demand for corn. Technical considerations were also noted as a rationale for today’s rally as daily price charts were showing an interim double bottom against the $3.72 ½ level (March). The USDA chief economist said they will make their decision tomorrow as to whether or not they will have a crop report for us on the 11th. It will all come down to if the shut-down persists through Friday. If the USDA stays shut down through Friday the report will be delayed. For what it is worth, if we do have a report, many feel we will see a lower corn yield along with a cut to harvested acres. Demand numbers are a bit up in the air; exports are solid while the ethanol grind may be slipping a bit. Conab will update Brazilian corn production next week. A minor cut in the first season corn crop cannot be ruled out while they will probably keep the second season corn crop steady with last month’s numbers.
The interior corn basis is mostly steady with only one change being seen; Davenport, IA bumps its basis 4 cents higher. The Gulf is holding its own as trades were being reported for the April, May, June and July time slots. Corn spreads inched fractionally tighter within the current crop year; old crop gains noticeably on the new crop.
Flat price corn gives us its best close dating back to Dec 20th. Today’s close in old crop corn eclipses the interim high dating back to the 21st. It will be interesting to see if today’s rally prompts and cash movement. If it doesn’t a test of the $3.83-$3.95 level will be expected. Daily momentum indicators are very close to suggesting a decent rally may be near at hand.
Daily Support & Resistance for 01/04
Mch Corn: $3.76 – $3.84
July Corn: $3.91 – $3.99
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.