Corn Commentary
May corn closes 1 ¼ cents higher ($3.88 ½), July 1 ½ cents higher ($3.97 ¼) and Dec 1 cent higher ($4.12 ¼)
April Chgo Ethanol closes 0.005 cents a gallon higher (1.405), May 0.001 cents higher ($1.426)
Flat price corn remains “under the influence”. On Monday the flat price was influenced by sagging soy and wheat prices; today it was just the opposite especially due to surging wheat prices. The chatter in the marketplace has not changed – low new crop acres, a short crop in SA working to offset higher than expected quarterly stocks and the possibility of late planting due to cold and wet conditions throughout much of the Corn Belt. Old crop corn tries to challenge its March highs only to get turned back by soft ethanol prices (one of the Chinese targeted commodities for increased import tariffs) as well as some cash corn movement. New crop prices were able to register new highs for the current rally but failed to give us a convincing close in new high ground. I get the impression that if corn traded in a room all by itself not much would be happening.
Interior cash corn prices are all over the place. Bids along the river systems that feed to the Gulf are softer. Processors bids have a firm tone due to most cash corn sales in recent days have been new crop. I do find it interesting the processor willingness to stand in despite the recent crash and burn in ethanol prices. The Gulf appears to be edging higher citing navigational woes for barges coming down the riverways. The nearby corn spread was a bit softer while old crop does gain fractionally on the new crop.
Am I missing something here as my impression of the price action suggests corn prices may have gone high enough with what we know currently? I think it would be healthier for the market long term if we saw some backing and filling of the recent rally. I do however understand the mentality of the funds – they don’t do anything quietly – they are either rushing in or rushing out. Maybe I’m out in left field but I don’t see the need to be long at current levels. I’m not looking for a big break but rather some better downside retracement vs. what we saw on Monday.
Daily Support & Resistance for 04/04
May Corn: $3.84 – $3.91
July Corn: $3.92 ½ – $4.00
Dec Corn: $4.07 ½ – $4.15
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