Dec closes 1 ½ cents higher ($3.51), March 1 ¼ cents higher ($3.60 ½) and July ¾ cent higher ($3.74 ¼)
Jan Chgo Ethanol closes 1.8 cents a gallon higher (1.605), Feb 1.8 cents higher ($1.559)
USDA announces 276 K T. corn sold to S. Korea
Fears that a drought may be developing in central southern Argentina sparks additional short covering. The USDA announced export sale also lent support as did the early strength in the soybean complex. The day’s highs were made in the first hour or so of the day session. The balance of the day was spent retracing those gains. Midday weather updates alluded to the idea that better moisture may be on tap for the drier areas of Argentina towards the end of the 11-15 day time frame. Although corn finished slightly higher it should be noted that in the “post” session prices did trade slightly lower on the day.
Interior corn basis levels ran steady to slightly mixed for the day. 6 locations ran steady, 4 locations ran slightly better and 1 river locations was slightly lower. The underlying trend, however, remains higher. The gulf offers no help as it ran easier on the day. Corn spreads were fractionally firmer on the day which I’ll attribute to the flat price short covering.
The immediate trend in corn reads higher while the longer term trend reads sideways. $3.65 to $3.70 appears to be a formidable hurdle for March corn. On Friday the USDA will update supply-demand (it is not a production report). The average guess for the US corn carryout is 2.413 billion bu.; an increase of 10 million. The average guess for the world corn carryout is 219.24 M T.; an increase of 1.05 M T. I’m thinking that if the corn market is going to follow through to the upside the weather play for Argentina needs to follow through.
Daily Support & Resistance March Corn: $3.53 – $3.65
July Corn: $3.67 ½ – $3.78
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