Corn Commentary Dec closes 2 ½ cents lower ($3.46 ¼), March 2 ¼ cents lower ($3.55 ¼) and July 2 ½ cents lower ($3.71 ¾)
December Chgo Ethanol closes 3.0 cents a gallon lower (1.585), Jan 1.5 cents lower (1.518)
USDA announces 172 K T. corn sold to Unknown
Weekly Corn Export Inspections – 889.6 K T. vs. 900 K – 1.100 M T. expected
It was a slow news day for the corn market; slow enough to attract some renewed selling. Many will tout the strength in the US dollar as the excuse for Monday’s weakness but I have to admit that when the US Dollar was falling last week it did very little as to supporting the corn market. It remains my idea that the US will remain the market to the world for corn until Sa comes online with its new crop and that is still months away. Weekly export inspections ran a touch below expectations. The trade continues to go back and forth as to whether or not the USDA will either give us a slight decrease in the national yield or a slight increase. For what it is worth the average trade guess calls for a slight decrease; 173.2 bpa vs. 173.4 bpa last month. The average guess on crop size guess is looking for a decrease of 16 million bu. and carryout is expected to decline by 20 million bu. The guess at the World projected ending stocks is expected to increase by 130 K T. As we move closer to the USDA production/supply demand update I’m thinking we will see tighter directionless trading.
Most interior cash markets are starting to see basis appreciation as harvest winds down especially in the central and eastern areas. I continue to hear that sales ran well less than expected given the crop size. Corn spreads ran mostly steady to fractionally easier on the day. Today was the first day of the “big boy” index fund roll. It will run through the end of the week. Once this index fund roll has come and gone along with harvest winding down basis levels
should see further appreciation which should eventually support the corn spreads.
Not that I think it means very much the trade is looking for corn harvest to be at the 84% completion level. The USDA reports the US corn harvest is now 86% completed vs. its norm of 85%.
I’m not expecting much between now and Wednesday morning at 11:00 AM CST. The mid-low $3.40’s should be support while the mid-low $3.50’s should act as resistance.
Daily Support & Resistance Dec Corn: $3.44 – $3.52 ½
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