Corn Commentary
March closes 3 cents higher ($3.66 ¼), July 3 ¼ cents higher ($3.80 ¾) and Dec 2 ¾ cents higher ($3.93 ¾)
Feb Chgo Ethanol closes 1.91 cents a gallon higher ($1.442), March 1.9 cents lower ($1.470)
USDA announces 141.2 K T. old crop corn sold to Unknown
Weekly Ethanol Grind – 1.051 Million bpd vs. 1.054 last week – Stocks 21.7 million bbls vs. 21.1 last week
Weekly Corn Export Sales – old crop vs. 700 K – 1.000 M T. expected – new crop 0-75 K T. expected
A lack of follow through selling following Tuesday suggestive sell signal prompts buying on Wednesday. Lending additional support was another strong week of grinding for ethanol and all the while maintaining a bit of SA weather premium. It should already be known that the US has a strong export program for minimally the first quarter of 2017; this has been further supported by continued daily export announcements.
Little change is being seen in the interior corn basis; the Ohio River ran 2 cents weaker while all other locations that I track ran unchanged. The Gulf basis appears a touch softer; have to think that is in response to recent farmer related selling. Corn spreads saw little change within the current crop year while old crop gains fractionally on the new crop. I remain with the idea that corn spreads don’t have much on the downside (increased carries) but the upside (tighter) remains questionable.
Despite the flat price inability to follow through following Tuesday suggestive sell signal the sell signal remains intact. To turn the momentum back higher march corn is going to need to see solid closes above the $3.70 level which also coincides with the 200 day MA. I remain with the frame of mind that the corn market is a trading range affair and I will trade it accordingly – that means selling rallies given where we are in relation to where we have been over the past number of months.
Daily Support & Resistance for 01/26
March Corn: $3.62 – $3.69
July Corn: $3.76 – $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.