Corn Commentary
May corn closed 2 ¼ cents lower ($3.87), July 2 cents lower ($3.95 ¾) and Dec 2 cents lower ($4.12)
May Chgo Ethanol closed 0.022 cents a gallon higher (1.487), June 0.016 cents higher ($1.487)
Weekly Ethanol Grind – 1.034 million bpd vs. 1.038 last week – Stocks – 21.8 million bbls vs. 22.4 last week
Weekly Corn Export Sales – old crop vs. 900 K – 1.400 M T. expected – new crop vs. 0-300 K T. expected
Minor backing and filling of the recent rally was the feature in today’s corn trade. I did not see any particular news item to prompt this other than some technical considerations that had been developing over the past few days. The trade is still looking at an extremely slow start to planting in many areas of the Corn Belt; especially in the north, northwest reaches. One will hear of the complaints that range from too cold, too cold & wet and just too wet. The trade will also mention the potential for better export business due to lower corn crops in SA. I’m still trying to figure out the USDA’s rationale for reducing corn feeding given the building animal herds. The other day I started to pick up on some developing concerns over the 2nd season corn crop in parts of Brazil. The talk suggests it has gotten a bit dry in the center-south regions and forecasts are maintaining a dry bias.
Just minor fluctuations are being noted in the interior corn basis on Wednesday. There is still some flip-flopping going on at river locations that feed to the Gulf. Processor bids continue to stand in. The Gulf stands in as well with its recent increases. Corn spreads were rather quiet on Wednesday; May loses a ¼ cent to July, Sept and Dec. Overall corn spreads stay relatively wide reminding us that we have the corn to meet current demands.
My slant on the flat price action in corn is that we are looking at the pause that refreshes. Over the past few days I got the impression the spec longs had been trying a bit too hard to force the flat price higher with the same old news. I think we have the groundwork for better prices down the road while minor corrections are all part of the process that gets us there. I believe the focus should be on buying corrections for long term considerations. Tomorrow’s trade should focus on updated forecasts for the Corn belt as well as weekly export sales.
Daily Support & Resistance for 04/12
May Corn: $3.85 ($3.82) – $3.91
July Corn: $3.93 ($3.91) – $3.99
Dec Corn: $4.08 ($4.06) – $4.15
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.