Corn Commentary
May corn closed 3 cents higher ($3.92 ½), July 2 ¼ cents higher ($4.00 ¾) and Dec 1 ½ cents higher ($4.16)
May Chgo Ethanol closed 0.003 cents a gallon lower (1.445), June 0.003 cents lower ($1.450)
Weekly Corn Export Inspections – 1.466 M T. vs. 1.000-1.800 M T. expected
US Corn Planted – 17% vs. 18% expected vs. 27% 5-year average
Flat price corn, both old crop and new crop, powers to new highs, new high closes, on the rally that started back in January. This was done despite the idea that a fair amount of planting was done this past weekend. Depending on where one is planting should continue into mid-week when a fair sized storm system moves through the Midwest. How much rain that gets dumped with this system will dictate how long producers will be out of their fields. Forecasts moving forward, as of this moment, suggest a drier bias with cooler temps (vs. the temps we will be seeing over the next couple of days) suggesting the US corn crop just may get planted in a timelier manner vs. thoughts of the past couple of weeks. Adding to the bullish fervor are concerns over Brazil’s 2nd season corn crop. It has been rather dry in recent days and forecasts continue to show a dry bias. Areas in Brazil that are being affected are southern Mato Grosso and points south and east. Given the idea that Brazil’s corn crop will be noticeably smaller vs. last year (lower acreage) and Argentina’s short crop corn traders in the US believe higher prices will be in the cards until a better idea can be had with our own corn crop.
Bull spreads were working within the old crop as well as old crop vs. new crop. A good part of the rationale behind this were just 10 deliveries against the May contract; oldest date 08/08/2017. Ideas are that we will continue to see pretty good disappearance in the feed and export sectors as we move through the 2nd half of the market season. Most interior basis levels read steady vs. late last week. There has been some corn moving in the last two days. These come from resting offers as most producers are busy in the field. Gulf values have been easing since early last week. Weekly export inspections were deemed solid as they were just past the midpoint of traders’ expectations.
Bull spreads are tightening along with the higher flat price – that’s text book bull market. Worst case scenario for the near term is a bit of backing and filling of the recent 16-17 cent rally. $3.96-$3.94 should be viewed as initial support for July corn while $4.12-$4.10 does the same for Dec corn. Weather forecasts for both the US (planting) and Brazil (developing 2nd season corn crop) will remain the primary focus within the corn trade.
Daily Support & Resistance for 05/01
July Corn: $3.96 – $4.05
Dec Corn: $4.12 – $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.