Corn Commentary
March Corn closes 1 ½ cents higher ($3.79 ¾), July 1 cent higher ($3.95 ½) and Dec ½ cent higher ($4.06 ½)
April Chgo Ethanol closes 0.016 cents a gallon higher (1.498), May 0.016 cents higher ($1.509)
It was another relatively quiet day for corn trading; just a 3 cent range. The “however” is the market stays firm. You’ve heard the adage “It doesn’t have to pour as long as it drips”. Well, the corn market just continues to “drip’ higher. The rationale for the firm trade has not changed – we’ve got a great export market as well as a strong domestic market. The corn crop in Argentina remains in question as does the 2nd season Brazilian corn crop. Speculative funds continue to be the best buyers while cash corn movement (commercial hedging) accounts for the best selling. Hopefully on Thursday we’ll get a better idea of the SA corn crop when CONAB reports and the USDA reports on Argentina. Thursday is also the day the BAGE updates us on the Argentine corn crop.
Interior corn basis levels continue to show a steady to defensive tone. Cash movement continues as the flat price grinds higher. the Gulf manages to stand in due to the ongoing disruptions (flooding) at selected river locations that feed down to the Gulf. Old crop corn continues to try and maintain a lead over the new crop.
I see nothing bearish in the recent price action. Attempts to sell off remain well received from the spec sector. If the daily fund activity report is anywhere close to being accurate it suggests the spec has bought another 50 K plus contracts since the last COT report. For your convenience I’ve attached a table of estimates for the USDA’s March update on Supply-Demand scheduled for Thursday, March 8th.
Daily Support & Resistance for 03/07
May Corn: $3.84 – $3.92
July Corn: $3.91 – $3.99
Dec Corn: $4.03 – $4.10
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.