Corn Commentary
Sept Corn closes 5 ½ cents lower ($3.40), Dec 6 cents lower ($3.51 ½) and March 6 cents lower ($3.63 ¾)
October Chgo Ethanol closes 0.006 cents a gallon higher ($1.550), Nov 0.001 cents lower ($1.499)
Highlights of USDA Corn Production/Supply-Demand report – US Old Crop – Lowered domestic usage by 50 million bu. – Increased exports by 70 million bu. – Lowered carryout by 20 million bu. – US New Crop – Lowered carryin by 20 million bu. – Increased yield by 0.4 bpa – Increased production by 31 million bu. – Increased Feed & Residual by 25 million bu. – Lowered domestic usage by 50 million bu. – Increased carryout by 62 million bu. – World – Increased new crop carryout by 1.60 M T.
If the data we saw from the USDA is anywhere close to final data the corn market will be dead in the water for some time to come; at least until the Brazilian corn growing season moves into focus. The bottom line is that we just have too much corn around. The only positive that I can cite for today’s trade is that we did hold the recent contract low at $3.44 ¼. The late short covering bounce we saw can be attributed to the sharp rally in the wheat market as it rallied 15 cents off of its day’s low.
The interior cash corn markets continue to show a defensive look. Harvest will be starting sooner vs. later and no one wants to get caught paying up. The Gulf remains quiet. Corn spreads continue to stay relatively wide.
As I mentioned earlier the only positive that came out of Tuesday’s trade was the recent contract low held. To confirm the corn market has made a bottom we will need to see closes above last week’s high, $3.62 Dec. $3.55 – $3.60 should act as decent resistance. If looks at a Dec corn weekly you can see that in the fall of 2014 we traded just below $3.20 and again in the fall of 2016. Given the numbers that the USDA gave us I’m not sure I can rule a move down to the $3.20 level.
Daily Support & Resistance for 09/13
Dec Corn: $3.44 (?) – $3.55
March Corn: $3.57 (?) – $3.68
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