Corn Commentary
March Corn closes 2 ¾ cents higher ($3.61 ½), July 2 ½ cents higher ($3.77 ½) and Dec 2 cents higher ($3.93 ½)
February Chgo CBOT Ethanol closes 0.005 cents a gallon lower ($1.380), March 0.003 cents lower ($1.390)
USDA announces 132.0 K T. of corn sold to Spain
Flat price corn continues to grind higher as it matches levels not seen since the 2nd week of November. Direct influences appear to be an improving export market and the less than desirable growing conditions in Argentina. In the 2nd week of February, the 8th I believe, Conab will give us their first impression of the 2nd season Brazilian corn crop. Most believe it should be down markedly vs. last year (67.2 K T.). Short covering from the spec sector continues to be the best buying. Spec shorts are not only being covered in the corn market but throughout the grain sector.
Most interior cash corn markets are showing a steady if not easier bias. The easier bias is due to an increase in farmer related selling. As the flat price moves higher we should continue to see a steady flow of farmer related selling. I get the impression the producer is letting the market comes to them rather than the producer going to the market. The Gulf basis, however, continues to show a steady to higher bias. Upfront corn spreads run steady on the day whereas the calendar spreads show a fractionally better bias.
All systems read “GO”. We have now closed above the past two months of corn trading. The next question to be answered is “how high”. A run to the low $3.70’s (March) cannot be ruled out given the amount of spec shorts still in the market.
Daily Support & Resistance for 01/31
March Corn: $3.57 – $3.65
July Corn: $3.73 – $3.81
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.