Corn Commentary

storck

Just My Opinion – Corn

Corn Commentary

March Corn closes 2 ¾ cents lower ($3.58 ¾), July 3 cents lower ($3.74 ¼) and Dec 3 cents lower ($3.89 ½)

February Chgo Ethanol expires unchanged ($1.463), March closes 0.012 cents a gallon lower ($1.431)

Weekly Corn Export Inspections – 1.073 M T. vs. 750 K – 1.050 M T. expected

USDA announces 130 K T. of corn sold to S. Korea

Monday brought us a lower albeit choppy price action to the corn market. Flat price corn traded lower right out of box Sunday night in response to the CFTC Commitment of Traders report showing more speculative short covering vs. what the trade had been expecting. Trade ideas had 42.5 K shorts being covered in the time frame from Jan 23rd to Jan 30th. The CFTC said 101.5 K shorts had been covered. Since short covering had been a major feature of the recent rally the CFTC figure now suggests the spec short position is more manageable. Adding to the negative price action was bearishness elsewhere in the grain complex as well as China starting an anti-dumping probe against the US involving sorghum from the previous year. Weather in SA is still being watched but not on the forefront vs. last week. There is still talk of a smaller 2nd season corn crop in Brazil (late planting, poor prices) and dryness in Argentina (rain is being forecasted for late this week and again next week).

Interior cash corn prices have taken on a mixed look Monday. River locations involved with export flip-flop back and forth amongst themselves depending on who needs corn vs. who doesn’t. Processors still show a supportive tone. The Gulf continues to hang tough. Remember – the US is currently the corn market to the world as it has the best prices vs. its competition. Corn spreads improved fractionally not only within the current crop year but also vs. the new crop.

Flat price corn stumbles vs. last week’s resistance testing rally. The idea is that the spec funds are no longer a dramatic short. Since a good portion of the rationale behind the recent rally had been the funds were too short what do we do now? I have to think corn will now test support, $3.57 to $3.54 between now and Thursday when the USDA updates SA production as well as US and World carryout projections. Right now it is expected that both US and World carryout projections will decline by very modest amounts.

Daily Support & Resistance for 02/06

March Corn: $3.55 – $3.61

July Corn: $3.70 ½ – $3.76 ½

 

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