Corn Commentary
May corn closes ½ cent lower ($3.74 ½), July¾ cent lower ($3.82 ½) and Dec ¼ cent lower ($3.97 ¼)
April Chgo Ethanol closes 0.001 cents a gallon lower (1.462), May 0.002 cents lower ($1.483)
USDA announces 110.0 K T. of corn sold to Peru
Flat price corn goes into a minor consolidation mode following the recent 20 cent plus sell off. Overall it was a relatively quiet day for trading; just a 3-4 cent daily range. I get the impression the trade, especially the spec sector, is trying to figure what to do next with their net long futures positions. Since last Tuesday I have the speculative fund sector liquidating roughly 69 K contracts. This would suggest they remain a considerable long in the market. Anything bought after February 26th is a loser. Late next week the USDA will give us the March 1st Quarterly Stocks and Prospective Plantings. Average trade estimates have yet to be released by the news services. My personal opinion as of right now is that the Stocks’ figure could have a slight friendly bias while acres should be close to what the USDA outlined for us in February.
Of the 12 basis locations that I follow 11 are running unchanged with Monday’s posting. It’s the far western location, Council Bluffs, which is running 4 cents lower but unchanged with late last week’s posting. I thought the Gulf was trying to stabilize yesterday but late postings showed additional easiness. Corn spreads ran mixed on the day with only fractional changes.
Flat price corn has sold off into a previous congestion area that acted as a launching level to the recent highs back in mid late February. Longs in the market now have to decide if they will continue to liquidate or wait and see how this level of congestion supports the market. Daily momentum indicators still read lower. With this in mind I can justify further weakness down the mid high $3.70’s (July). This would equate to the mid low $3.90’s for December. If we do get to these levels it would probably come in a grinding type manner.
Daily Support & Resistance for 03/21
May Corn: $3.72 ($3.69) – $3.79
July Corn: $3.80 ($3.77) – $3.88
Dec Corn: $3.94 ½ ($3.92) – $4.01
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.