Corn Commentary
Dec Corn closes 1 ½ cents lower ($3.52 ½), March 1 ½ cents lower ($3.65 ¼) and July 2 cents lower ($3.81 ¼)
October Chgo Ethanol closes unchanged ($1.527), Nov 0.008 cents a gallon lower ($1.487)
Weekly Corn Export Sales – 320.2 K T. old crop vs. 500-800 K T. expected – no new crop vs. none expected
USDA announces 233.8 K T. corn sold to Unknown
IGC (International Grains Council) increases the World corn crop to 1.029 billion T. vs. the USDA at 1.032 billion T.
Spinning wheels go round and round and the corn market goes nowhere fast; barely a 3 cent daily range. Weekly export sales were puny at best; now lagging last year’s sales pace by 7.2 M T. I believe it’s called export competition from SA’s monster corn crop. On August 31st Dec corn made a low at $3.44 ¼ – three days later Dec corn made a high at $3.62 – we’ve traded in that range ever since. The onset of harvest is working to keep this market under wraps. Yield reports continue to be variable but not enough to offset the idea that the most recent from the USDA is that far off. Tomorrow, Friday, the USDA will try and finalize last year’s carryout (this year’s carryin); the average trade guess is not small at 2.353 billion bu. and this compares to last year’s figure of 1.737 billion bu. I guess it’s no wonder the corn market cannot go anywhere given the current fundamental outlook (old crop and new crop ideas combined).
The interior corn basis continues with its defensive look. A combination of the onset of harvest and higher freight rates are keeping commercial end-users on the defensive. It is interesting to note that despite the ugly looking basis levels in many areas prices being paid are better vs. last year at this time (with 2 exceptions). The Ohio River is 14 cents better, Burns harbor is 9 cents better, Decatur, IN is 17 cents better, Lincoln, NE is 22 cents better, Decatur, IL is 12 cents better, Cedar Rapids, IA is 9 cents better, Toledo, OH is 20 cents better, Seneca, IL is 12 cents worse, Davenport, IA is unchanged, Linden, IN is 25 cents better and Council Bluffs, IA 16 cents better. Corn spreads showed some fractional improvement on the day but still continue to be at or near contract lows; 3-5 cents wider vs. last year.
Sure; it’s easy to call the corn market a trading range affair for the past few weeks. What should be noted is that we are seeing a succession of lower highs and higher lows; a sideways triangular formation. Technical Trading 101 will suggest that more times than not the market will eventually break out of this formation in the direction of the underlying trend. I say more times than not because nothing in this business is 100%. Looking at the Stocks report tomorrow; it’s a non-event or slightly bearish (just my opinion).
Daily Support & Resistance for 09/29
Dec Corn: $3.46 – $3.56
March Corn: $3.59 – $3.69
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