Corn Commentary


Just My Opinion – Corn

Corn Commentary
March closes 4 ¾ cents lower ($3.57 ¾), July 4 ½ cents lower ($3.72) and Dec 3¾ cents lower ($3.85 ½)
Feb Chgo Ethanol closes 0.4 cents a gallon higher ($1.480), March 0.1 cents lower ($1.504)
Weekly Corn Export Inspections – 1.061 M T. vs. 750-950 K T. expected
USDA announces 105 K T. old crop corn sold to Colombia
Flat price corn falls apart as it continues to confirm the market is no better than a long term trading range affair. Last Tuesday the flat price challenged the high side of the suspected trading range and registered a downside reversal. That reversal continues to hold true. Impetus for the sell-off continues to be the overall strength of the US Dollar and no weather threats being seen in the developing SA crop. On Friday the CFTC reported that the spec sector of the trade had become a net long in the market for the first time in months. Granted we have a good export program spreads (staying relatively wide) continue to tell us that we have the corn to meet that demand. Sell-offs elsewhere in the grain sector added to the bearish price action. Chatter continues to talk about nervousness around trade agreements as well as possible unknowns in the bio-fuel sector.
Interior cash corn markets take on a mixed look. The Ohio River appears a bit easier while other river locations involved with export appear steady to better. Processor bids appear easier and that is in response to lower ethanol margins. The Gulf sees little change vs. where it was trading last week. As I mentioned earlier corn spreads run steady to easier despite the decline in the flat price. It would suggest that the movement we saw leading up to last week’s high created enough movement to satisfy most end-users for the time being.
Flat price corn is advertising it is no better than a broad trading range affair. I do see some trendline support (dating back to the Sept lows) that comes in around the $3.52-$3.51 (March). Failure there would suggest something closer to $3.45 and after that things would get rater ugly. Daily momentum indicators clearly suggest an interim downtrend. Shorter term indicators suggest we are a bit oversold but that can be alleviated with just minor backing and filling. New interim resistance is $3.61- $3.63 (March)
Daily Support & Resistance for 01/31
March Corn: $3.52 – $3.62
July Corn: $3.66 – $3.76


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