Corn Commentary
May corn closes 8 ½ cents higher ($3.89 ½), July 8½ cents higher ($3.98 ¼) and Dec 8 ¼ cents higher ($4.13 ¼)
May Chgo Ethanol closes 0.022 cents a gallon higher (1.422), June 0.020 cents higher ($1.435)
Weekly Corn Export Sales – 898.3 K T. old crop vs. 1.000-1.300 M T. expected – 11.0 K T. new crop vs. 100-300 K T. expected
Now that the Tuesday night, Wednesday morning fiasco has ended cooler heads have prevailed in the US corn market. Traders have gone back to talking about the short falls in Argentina and Brazil, low US prospective acres and a slow start to this year’s planting due to unusually cold in many areas, cold & wet in others and others just wet (most forecasts suggest these weather patterns will be with us well into the month of April). With that said Dec corn registers a new high close for the rally that started back in January (no new highs however).
Interior cash corn markets are either steady or noticeably higher. Illinois River locations are showing the most dramatic strength; I’ve got a couple of locations that are showing 12-13 cent improvements since Monday. The Gulf, too, is showing some impressive gains. Despite the strength corn spreads really are showing all that much. I’m thinking the next supply-demand report will show a hike in the carryout leading many to believe we have the corn to meet any new influx of demand. In this case it will be the market’s function to get that corn on to the open market and that is usually done with higher prices; both basis and flat price. Tomorrow starts the “big boy” index fund rolling; out of May and into July.
The other day I talked about the corn market acting a bit iffy and I said I’d like to see a better retracement of last Friday’s rally. Little did I think it would all come in one big swoop and last just for one day. This was a great example of having your orders in ahead of time and not waiting to see the price action and then act. In this case you had to be up in the middle of the night. Long story short; the last two days of price action is extremely impressive and suggests new highs are near at hand.
Daily Support & Resistance for 04/06
May Corn: $3.83 – $3.95
July Corn: $3.92 – $4.03
Dec Corn: $4.07 – $4.18
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.