Dec closes 5 cents lower ($3.31 ¾), March 6 cents lower ($3.42 ½) and July 5 ¾ cents lower ($3.57 ¾)
December Chgo Ethanol closes 0.5 cent a gallon higher (1.655), Jan unchanged (1.574)
Weekly Corn Export Sales – 761.6 K T. old crop vs. 900 K – 1.200 M T. expected – no new crop vs. none expected
The recently established downwards momentum carries the ball on Thursday as prices continue to move lower. Weekly export sales were deemed disappointing based on expectations. Weakness in the feed wheat sector added additional pressure. The US dollar was a bit softer on Thursday but still quite strong. Weather in SA, for the most part, remains conducive to a good 1st season crop in Brazil. There are some minor concerns around dryness in S. Argentina but so it is a bit early for any major concern.
As the interior basis rolls from Dec to March it seems that half of the locations did it with improvements to the basis and the other half did it in line with the Dec/March spread. The Gulf, too, is showing some minor improvements as we move into the month of December. Cash movement is not normally much to write home about in December as most producers will hold off until the New Year before instituting any new sales. Still no deliveries against the Dec contract; that allows Dec to gain in the spreads. March forward spreads remain soft. Now that we have the idea of next year’s corn acres being down noticeably additional amounts of carry will be stuffed into the old crop/new crop spreads.
So how bearish is the corn market going to get? Daily momentum indicators clearly read lower. Weekly charts are just beginning to show signs of rolling over. If March corn is going to be any good $3.40 to $3.35 should try and offer some support. Failure to hold the $3.35 level will suggest March’s contract low at $3.25 will get tested.
Daily Support & Resistance March Corn: $3.40 – $3.48 July Corn: $3.55 – $3.63
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