Corn Commentary
May corn closed 5 ½ cents lower ($3.93 ¼), July 5 ½ cents lower ($4.00 ¾) and Dec 4 ½ cents lower ($4.16 ½)
June Chgo Ethanol closed 0.032 cents a gallon higher ($1.486), July
Weekly Corn Export Inspections – 1.916 M T. vs. 1.100-1.600 M T. expected
Corn Planting Progress – 39% planted vs. 37% expected vs. 44% 5-year average
Weakness in soy and wheat coupled with the idea corn planting had made some pretty decent progress last week had corn prices under the gun on Monday. Watch for the eastern Midwest to continue to lag in planting vs. points further west. For what it is worth most forecasters are touting 2-3 weather systems to move through the Midwest over the next 10 days. They are not expected to be “gully washers” but just enough to keep planting on the defensive vs. what has been done already. Also; the most recent COT report suggested the spec is the longest he has been for the past two months. Adding to all of this are forecasts for some of the dry areas of Brazil (2nd season corn crop) to see some moisture late this week, early next week.
Interior cash markets appear to be running steady to easier. Given today’s break in the flat price and producers being pre-occupied with field work one would think basis levels should stabilize if not improve some over the next couple of days. The Gulf market appears to be stable right now. If export inspections continue at the clip we saw today one would think we should see further improvements over the near term. Corn spreads were under the gun to day along with the flat price selling; old crop losing to the new crop.
It seems the flat price is in the midst of correcting the recent modest overbought status. The best looking near term support for July corn is the $3.95-$3.94 level. Daily technical data suggests the correction is just starting while shorter term inter-day data suggests the market has been in a corrective mode dating back to late last Thursday. As of this writing I’m thinking one more day of downside correction and then consolidation ahead of Thursday’s USDA data.
Daily Support & Resistance for 05/08
July Corn: $3.98 – $4.04
Dec Corn: $4.14 – $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.