Corn Commentary
March Corn closes 1 ¾ cents higher ($3.49 ¼), July 1 ¾ cents higher ($3.66) and Dec 1 ¾ cents higher ($3.82 ½)
January Chgo CBOT Ethanol closes 0.001 cents a gallon higher ($1.268), Feb 0.004 cents higher ($1.296)
Weekly Ethanol Grind – 1.077 million bpd vs. 1.089 million last week – Stocks – 22.3 million bbls vs. 22.4 million last week
Weekly Corn Export Sales – old crop 800 K -1.100 M T. expected – new crop 0-100 K T. expected
Flat price corn finally catches a modest bid; mostly from higher wheat prices. The weekly ethanol grind has been easing for the past two weeks. Despite this minor easing trend the grind, overall, remains rather stout. The weather in SA remains conducive to crop development. The wild card down there will be the 2nd season corn crop in Brazil. Many feel 2nd season acres will be cutback due to late planting as well as the high cost of planting corn vs. current prices. Much below normal temps will soon grip the majority of the Midwest. This will promote better feeding rates but hamper logistics (physical movement). Producer selling remains quite light and is not expected to improve until we get into the New Year.
If not steady interior corn prices (basis) are moving higher. The Gulf too shows signs of trying to firm. Despite what looks like a firmer cash market corn spreads ran mostly unchanged on the day. For what it is worth the July/Dec corn spread registered a new contract low (17 cents under) before coming back into its months old range.
So – does one day make a market? I would like to think Wednesday’s performance vs. the previous two days’ performance suggests the worst is over for the time being; meaning new contract lows. This is not meant to mean a rally will soon be starting but rather the development of a consolidating type trade. If we do see a rally it will be considered year-end short covering. I think most will agree that the funds are too short from a historical standpoint but what’s out there to prove them wrong?
Daily Support & Resistance for 12/21
March Corn: $3.47 – $3.53
July Corn: $3.64 – $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.