Corn Commentary
May corn closes 1 ½ cents lower ($3.89 ¼), July 1 ¼ cents lower ($3.97 ¾) and Dec ¾ cents lower ($4.14)
May Chgo Ethanol closes 0.006 cents a gallon higher (1.465), June 0.006 cents higher ($1.471)
CONAB – Brazilian Corn Production – 88.61 M T. (25.6 + 63.01) vs. 87.28 M T. last month
Highlights of the USDA Supply-Demand Report – US – cut Feed use 50 million bu. – cut FSI 5 million bu. – increased carryout 55 million bu. – World – cut Global production 5.67 M T. (Argentina down 3.0 M T., Brazil down 2.5 M T.) – cut total usage 5.24 M T. – lowered carryout by 1.39 M T.
Based on traders’ expectations the USDA supply-demand report for corn was a big nothing as carryout data (both US & World) were right on with their ideas. The flat price tried to ease prior to the numbers; went nowhere. Right after the report the flat price tried to rally; went nowhere. The end result was marginally lower closes led by the bear spreads. So where do we go from here? I have to think the trade will go back to looking at demand numbers, export in particular as well as planting rates. Weather forecasts still suggest a less than desirable start to corn planting across much of the Corn Belt. Can anyone tell me why the USDA cut corn feed usage given the animal numbers we have? My only guess is DDG’s. Its not wheat as the USDA cut that feed usage as well.
The interior corn basis went mixed on the day vs. yesterday. I’ve got mixed as to river locations; some higher, some lower. Processors continue to stand in as old crop movement remains nothing to write home about. The Gulf continues to act like it needs corn. Bear spreads were working on the day – nothing big, just fractional losses.
I’m getting the impression from the flat price action the corn market needs something more to continue to the advance. In other words continued good demand as well as more woes around planting. I don’t think the market is going to fall out of bed but some downside retracement cannot be ruled out. The spec trade is already a decent sized long. I’m thinking they need more fuel for the fire to add to their existing net longs. Long story short – focus on the shorter term inter-day charts for buying guidelines.
Daily Support & Resistance for 04/11
May Corn: $3.85 ($3.82) – $3.95
July Corn: $3.93 ($3.91) – $4.04
Dec Corn: $4.08 ($4.06) – $4.20
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.