Corn Commentary
Dec Corn closes 6 ¾ cents lower ($3.41 ½), March 6 ½ cents lower ($3.54 ¾) and July 6 cents lower ($3.71 ½)
December Chgo Ethanol closes 0.006 cents a gallon lower ($1.440), Jan 0.005 higher ($1.425)
Weekly Corn Export Sales – 2.364 M T. old crop vs. 1.200-1.600 M T. expected – 574.1 K T. new crop vs. 500-700 K T. expected
The USDA is suggesting another record corn yield; 175.4 bpa. This pumps up production by another 298 million bu. Total US demand was increased (+150 million bu.) but not enough to offset the build in production. World ending stocks increased by 2.90 M T. World usage increased but not enough to offset the 5.10 M T. production build.
To make a long story short nearby corn contracts register new contract lows along with closes in new contract low ground. Given this price action, breaking out of the 10 week old trading range to the down side, one has to think the spec short will now approach record levels. I’m told the managed money record short is 229 K contracts recorded back in March of 2016. Back then March corn did not trade below $3.48. We’re not far from that level now. Back then the stocks to usage ratio were 13.56 percent. Stocks to usage now sit at 17.22 percent. This suggests we can go lower and challenge the record short position.
Prior to the USDA report interior cash corn markets were showing a steady to higher bias. Now that the report is behind It will be interesting to see if any producers throw in the towel. Corn spreads ran steady to easier on the day.
Now that we have broken out of the 10 week old trading range to the downside the charts look absolutely ugly and we are not yet oversold. Massive looking technical resistance now sits 5 cents above current levels.
Daily Support & Resistance for 11/10
Dec Corn:??? – $3.46
March Corn:??? – $3.59
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