Corn Commentary
July Corn closed 10 ¾ cents lower ($3.80 ¾), Sept 10 ¾ cents lower ($3.89 ¾) & Dec 10 ½ cents lower ($4.01 ¼)
June Chgo Ethanol closed 0.032 cents a gallon lower ($1.430), July 0.022 cents lower ($1.456)
Weekly Corn Export Inspections – 1.554 M T. vs. 1.100-1.600 M T. expected
Weekly Corn Crop Rating & Progress – 78% GE (-1%) vs. 79% expected – Planted – 97% vs. 97% expected – Emerged – 86% vs. 83% 5-year average
Speculator liquidation continues!!! The idea that this season’s US corn crop is off to a good start prompts additional liquidation. Cratering prices elsewhere within the Ag complex adds to the pessimism. Trade/tariff talks between the US and China over the weekend appear to have gone nowhere. China refuses to be bullied by the US. The same type of stance is developing with the NAFTA talks – both Canada and Mexico refuse to back down to US bullying. On the weather front – some forecasters are calling for a “ridge” to develop over the central US Plains this week but no one has it lasting past mid-month. I’ve seen other forecasts that call for periodic rain events that will slip through/over the “ridge” that will work to keep Illinois east watered.
Interior cash corn markets are running steady to the processors. River locations that feed to the Gulf are running easier due to higher freight rates. The new month brought lower Gulf postings. Corn spreads continue to show a bearish bias. As much as I think we have an excellent corn export program the widening corn spreads tell me we have the corn and then some to meet that demand.
Last week I talked about the mid-low $3.80’s as being support for July corn and the mid-low $4.00’s being support for Dec corn – we’re here and the price action is not showing any signs of support. Short term inter-day data reads oversold while daily technical data does not. Personally I cannot sell into this break while fading it is more of a wishing and hoping type maneuver. The 200 day MA for Dec corn comes in at $3.97 ½ or so which also coincides with a previous consolidation effort from $3.98 to $3.95. July corn took out its 200 day MA, $3.92 ¼. The neckline of July corn’s bottom ranges from $3.75 to $3.71. I think it’s a bit early to say this year’s corn market has been made so any challenge of the aforementioned support areas will bring out the spec buying within me.
Daily Support & Resistance for 06/05
July Corn: $3.77 ($3.75) – $3.87
Dec Corn: $3.97 ($3.95) – $4.08
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