Corn Commentary
March closes 1 ¼ cents higher ($3.66 ¼), July¾ cent higher ($3.80) and Dec 1 ¾ cents higher ($3.93 ½)
Feb Chgo Ethanol closes 2.8 cents a gallon lower ($1.475), March 2.6 cents lower ($1.502)
USDA announces 110.4 K T. old crop corn sold to unknown
Weekly Ethanol Grind – 1.054 million bpd vs. 1.049 week ago – Stocks – 21.1 million bbls vs. 20.0 week ago
Weekly Corn Export Sales – old crop vs. 900 K – 1.200 M T. expected – new crop vs. 100-300 K T. expected
Flat price old crop holds up quite well although no new highs were seen. Support comes from another record high weekly grind for ethanol. Ethanol prices suffered as stocks build. The USDA export sales announcement lent support as well. The best support, in my opinion, came from inter-market spreading; buying corn selling wheat. The March/March spread corrects 16 cents from Tuesday’s high to today’s low. The corn market was able to shrug off the effects of the stronger US dollar as US corn remains the best origin for world imports. New crop corn was the best performer as Farm Futures suggests next season’s planted acres will decline by 3.5 million acres. Dec corn did register new highs for the current rally but does remain range bound.
Interior cash corn markets ran steady to easier. The locations that ran easier were on the river systems. Despite the easier basis on the river systems the Gulf continues to firm. Corn spreads within the current crop year were slightly better – old crop, however, loses to the new crop and I’m thinking that is in response to the new crop acreage ideas.
Flat price corn is still a trading range affair. I do get the impression that the trade wants to see what’s above the trading range highs. It wouldn’t surprise me to see some “seek out & destroy” buying over the near term but I question the market’s ability to sustain the new highs on its own merits. If corn prices are going to sustain higher highs it is going to need some outside market help.
Daily Support & Resistance for 01/20
March Corn: $3.60 – $3.69
July Corn: $3.74 – $3.83
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.