Corn Commentary
July Corn closed 3 ¾ cents higher ($4.08 ½), Sept 3 ¾ cents higher ($4.17 ¼) & Dec 3¼ cents higher ($4.26 ½)
June Chgo Ethanol closed 0.012 cents a gallon higher ($1.504), July 0.011 cents higher ($1.526)
USDA announces 140 K T. optional origin corn sold to Saudi Arabia – 70 K T. old crop, 70 K T. new crop
Weekly Ethanol Grind – 1.028 million bpd vs. 1.058 million week ago – Stocks – 22.1 million bbls vs. 21.5 million week ago
Weekly Corn Export Sales – old crop vs. 700 K – 1.100 M T. expected – new crop vs. 100-250 K T. expected
Flat price corn continues to move higher. The news around the rally really hasn’t changed. We continue to hear of concerns around getting the balance of the crop planted in a timely manner as well as concerns about developing dryness in some of the central and southern areas of the Corn Belt. China did issue a statement to its big grain companies to “buy American”. I’m not sure they are going to buy that much US corn (without a crop shortage on their part) but a headline like that does add fuel to the fire. For what it is worth – the northeastern reaches of the Chinese corn growing areas are experiencing a noticeable dry bias. This should be watched as we move forward.
Interior cash corn bids run mostly unchanged on the day. Old crop corn’s advance into new highs for the current rally is attracting some movement but bull spreads did manage to work today. I have to think it is the fund buying upfront that gave the bull spreads a fractional bias today. The trade continues to talk about a better US export program going forward but cash markets continue to remind us its not quite here yet.
New highs, new high closes for the rally that started back in January; nothing bearish about that. One has to go back to last June to find nearby corn prices this high. Weekly charts suggest the next level of resistance for nearby corn is the $4.20 level. The consolidation July corn saw from May 3rd to yesterday measures to the mid-low $4.20’s. Similar consolidation in the Dec contract measures to the mid-$4.30’s. Given the price action of the last 3 days sell stops are developing just below the Monday, Tuesday lows.
Daily Support & Resistance for 05/24
July Corn: $4.05 – $4.18
Dec Corn: $4.22 – $4.35
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