Corn Commentary
March closes 2 cents higher ($3.59 ¾), July 1 ¾ cents higher ($3.73 ¾) and Dec 1¾ cents higher ($3.87 ¼)
Feb Chgo Ethanol closes 0.4 cents a gallon higher ($1.480), March 0.1 cents higher ($1.504)
A noticeably weaker US dollar coupled with thoughts that Monday’s break may have been overdone had the corn market in a consolidation phase on Tuesday that featured some minor upside backing and filling. The weather/forecasts for SA continue to be non-threatening. The demand side of the equation is focusing on a solid export program for the next three months or so. Feed demand should continue to be no less than solid. The more efficient ethanol processors will continue to bid for corn. Going forward the traders’ focus will be on export demand and growing conditions in SA.
Interior basis levels are running steady to better at most locations. The recent break in the flat price has shut down producer selling. The “however” to this is a weaker Gulf basis. Corn spreads ran steady to fractionally better within the current crop year while the old crop ran mixed vs. the new crop. Within the next couple of months focus will turn to evaluating old crop stocks vs. the idea of lower new crop acres.
The technical price action still suggests the corn market is no better/no worse than a trading range affair. The day-to-day trade will take its cue, I think, from shorter term (inter-day) technical observations. In other words fading short term breaks as well as rallies.
Daily Support & Resistance for 02/01
March Corn: $3.56 – $3.63
July Corn: $3.70 – $3.77
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.