Corn Commentary
Dec Corn expires ½ cent lower ($3.36 ¼), March closes ½ cent lower ($3.48 ½), July ½ cent lower ($3.65) and Dec ½ cent lower ($3.80 ¾)
January Chgo CBOT Ethanol closes 0.021 cents a gallon lower ($1.274), Feb 0.019 cents lower ($1.305)
Weekly Corn Export Sales – 866.9 K T. old crop vs. 700 K – 1.100 M T. expected – no new crop vs. 0-100 K T. expected
Flat price corn has moved into a minor holding phase just above the contract lows that were set on Tuesday. The best support has been a lack of selling as many believe the spec trade has gotten too short. What’s out there to spark a short covering rally over the near term remains to be seen. Weekly corn export sales were deemed a non-event. Yes, I think we’ve got great domestic demand but without export or a crop scare the market will struggle. Option volatility (at the money March puts and calls) came into the day at 11.7. The market’s not going anywhere sustained on the upside with this low of volatility. Remember – volatility is synonymous with uncertainty – this low number is telling us we have no uncertainty at this time.
Not much change being seen with the interior corn basis. Decatur, IL improves 2 cents and Toledo improves 4 cents. All other locations that I track are unchanged. The Gulf basis remains nothing special. Corn spreads ran flat on the day. For what it is worth – corn spreads have been a non-event for most of the late fall, early winter.
So here we sit just on top of recent established contract lows. Volatility is in the sewer. The size of the spec short can be friendly to the market if something comes along to rattle their cage. Unfortunately I don’t see anything in the near term unless the forecasted weekend weather in Argentina is a bust.
Daily Support & Resistance for 12/15
March Corn: ??? – $3.53
July Corn: ??? – $3.69
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