Corn Commentary
March Corn closes 1 ½ cents lower ($3.51 ½), July 1 ½ cents lower ($3.67 ¾) and Dec 1 cent lower ($3.85)
February Chgo CBOT Ethanol closes 0.018 cents lower ($1.341), March 0.017 cents lower ($1.367)
Weekly Ethanol Grind – 1.061 million bpd vs. 996 K previous week – Stocks – 22.7 million bbls vs. 22.7 previous week
Farm Futures suggests next year’s corn acreage will be 90.1 million acres vs. 90.2 last year
Weekly Corn Export Sales – old crop 500-800 K T. expected – new crop none expected
Flat price corn stumbles at the low end of suspected interim resistance. Weather worries out of Argentina persist but the corn market ignored it. The weekly ethanol grind had a nice comeback vs. a recent slowdown. I did see one item that was disturbing, almost bizarre. The International Grains Council (IGC) updated their idea for World corn production for the 2017/18 season; 1.054 billion T. vs. the most recent USDA at 1.044 billion T. Now here comes the “bizarre”; they are projecting by the end of the 2017/18 marketing season World corn stocks will sit at 322 M T. vs. the current estimate of 206 M T. They are suggesting “the revision mainly reflected adjustments to historical corn figures for corn stocks in China”. As I said “bizarre”. As it stands now China is already 38% of the World’s projected corn carryout (79.55 M T. vs. 206.57 M T.)
The interior corn basis saw little change vs. the previous day’s posting. The Gulf market appears to have eased just a touch. I’m told cash sales have improved with the recent rally but overall sales are modest at best. Corn spreads ran unchanged within the current crop year while old crop loses ½ cents vs. the new crop.
The easier trade in the corn market was due to the IGC announcement I’ll advocate ownership on any further weakness into Thursday. Once we got out the “holiday” mode we saw the weekly ethanol grind improve. I believe we could see the same for the weekly export sales. If the corn market is developing some sort of an interim low for the development of a trading range affair $3.49-$3.48 March should be viewed as support. The initial hurdle on the upside is still the $3.55-$3.56 level followed by $3.60.
Daily Support & Resistance for 01/18
March Corn: $3.49 – $3.55
July Corn: $3.65 – $3.71
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.