Corn Commentary
March Corn closes 2 cents lower ($3.65 ½), July 1 ¼ cents lower ($3.81 ½) and Dec 1 cent lower ($3.96)
March Chgo Ethanol 0.009 cents a gallon lower ($1.475), April 0.011 cents lower ($1.484)
Weekly Corn Export Inspections – 938.1 K T. vs. 800 K – 1.000 M T. expected
Both old crop and new crop corn make new highs for the current rally by 1 ¼ cents and then they stumble. The end result was an outside day with lower closes; old closes below the previous day’s low and new crop closes at the previous day’s low. Initial strength came from ongoing concerns over Argentine growing conditions. There was some moisture over the weekend but not that widespread; current forecasts continue to show a drier bias although noon updates offered chances of slightly better moisture. Weekly export inspections were deemed solid as they were mid-range of expectations.
Interior cash corn prices were running steady to easier. I’m sure we saw a new round of cash movement with the new highs for the move. Recent heavy rains Illinois east has resurrected ideas of flooding along rivers handling barge traffic. That adds to the easiness at selected basis locations. Spreads ran softer led by the March contract. Liquidation ahead of next week’s 1st notice day was noted. With the pick-up in US exports the Gulf continues to stand strong. The anticipated logistical problems should work to keep the Gulf relatively well supported.
So – will Tuesday’s suggestive looking reversal attract additional selling as we move forward? I would be surprised to see further leaking down to the $3.60 level basis March. March options expire on Friday and the $3.60 strikes (puts and calls) carry the lion’s share of open interest.
Daily Support & Resistance for 02/21
March Corn: $3.63 – $3.68 ½
July Corn: $3.78½ – $3.84
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.