Corn Commentary
Dec Corn closes 3 ¼ cents lower ($3.46), March 3 ¼ cents lower ($3.59 ½) and July 3 ½ cents lower ($3.75 ¾)
November Chgo Ethanol closes 0.005 cents a gallon higher ($1.425), Dec 0.003 cents higher ($1.412)
USDA announces 150.0 K T. of corn sold to Mexico
Trading funds continue to keep their foot on the corn market’s neck. Daily trading ranges were once again tight and lower. The day’s low for Dec corn was just 1 ½ cents from the contract low registered on August 31st. Volatility continues to be quite low which in turn leads us to the quiet daily trade. As difficult as it is to try and trade this market I have to keep reminding myself that low volatility is synonymous with a lack of uncertainty. My question is whether or not the USDA can say anything to change this.
Interior cash markets are not showing much of a change on Wednesday. Processors appear hesitant to bid for corn given the recent break in ethanol prices. River bids’ recovery from the previous week’s transportation problems is beginning to slow as Gulf prices have softened. Granted farmer movement is near non-existent export demand (lack thereof) is offsetting. Corn spreads continue to stay wide.
The rally we saw in the first week of September has just about been fully retraced. Spec funds are once again a more than healthy short. As I questioned earlier can the USDA change the current dismal outlook (price performance) the corn market is experiencing. From a technical standpoint the corn market may be setting itself up for an exhaustion low if the USDA report is considered bearish. My bottomline – I cannot bring myself to sell new lows in the corn market.
Daily Support & Resistance for 10/12
Dec Corn: $3.44 (?) – $3.56
March Corn: $3.57 (?) – $3.70
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.