Corn Commentary
March Corn closes 1 ¾ cents higher ($3.65 ¼), July 1½ cents higher ($3.80 ¼) and Dec 1 ¼ cents higher ($3.94 ¾)
March Chgo Ethanol 0.015 cents a gallon lower ($1.408), April 0.010 cents lower ($1.430)
Weekly Ethanol Grind – 1.057 million bpd vs. 1.040 million one week ago – Stocks – 23.5 Million bbls vs. 23.0 million one week ago
Weekly Corn Export Sales – old crop vs. 1.300-1.500 M T. expected – new crop vs. 0-100 K T. expected
Flat price corn continues to move higher fueled by strong demand for export as well as strong export demand for corn’s byproducts. Prices are now at levels not seen since late October, early November. Flaky weather in SA adds additional fuel for the rally. Tomorrow morning CONAB will be out with their latest ideas on Brazilian corn production. This report will include their first legitimate report for the 2nd season corn crop as in past reports they have been using last year’s figure of 67.2 M T. Many feel tomorrow morning’s number will be closer to 63.0 M T. Adding to the CONAB report the USDA will update both US and World Supply-Demand. Not much change is expected with the US carryout; maybe a bit lower. The trade will be focusing on what the USDA may have to say about the Argentine corn crop; that is expected to come lower as well. The bottom line to World stocks is that they may come in lower vs. trade expectations.
Most interior cash corn prices continue to show a relatively firm tone. We’ve got great demand from the export sector as well as from the processing sector. Corn spreads continue to inch tighter suggesting the rally is not only technical short covering but demand buying as well.
Nothing in the price action suggests the current rally is running out of steam. Next target is the $3.68-$3.70 level (March). Also, can’t help but notice that implied volatility is starting to improve. That suggests uncertainty is coming back to the corn market. I view that as another bit of rationale suggesting the rally continues on.
Daily Support & Resistance for 02/08
March Corn: $3.61 – $3.70
July Corn: $3.76 – $3.85
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