Corn Commentary
Dec Corn closes 2 cents lower ($3.49 ½), March 2 cents lower ($3.62 ¼) and July 1 ¾ cents lower ($3.79)
October Chgo Ethanol closes unchanged ($1.480), Nov 0.010 cents lower ($1.452)
Not much of a corn trade on Tuesday; not even a 3 cent range. Despite the slow trade prices edge lower as they take their cue from the increase in corn crop conditions. I’m not sure how the USDA recognizes improved conditions when the corn plant is in its last stages of life. What few reputable yield updates I have seen going into the October 12th USDA crop report it appears more and more opinions are coming in line with a 169.9 bpa yield. The slow trade is a reflection of the low volatility (volatility = uncertainty).
Interior cash corn prices (basis) remain on the defensive. Harvest is not as far along as some would like to think but basis levels are reflecting the size of the crop vs. the lack of offsetting demand. Logistical problems along the river systems leading to export hubs has grain backing up in the interior; just another reason for the defensive basis. The Gulf basis stays relatively strong vs. the interior basis which verifies the transportation issues involving grain moving to the export hubs; not that the export demand is all that strong. Needless to say corn spreads stay wide.
The recent price action suggests the idea of a trading range affair will soon be challenged on the low side. As of this writing inter-day price action suggests the mid-$3.40’s (Dec) will hold at least on the current 2-day move lower.
Daily Support & Resistance for 10/04
Dec Corn: $3.46 – $3.54
March Corn: $3.59 – $3.67
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.