Corn Commentary
July Corn closed 5 ½ cents lower ($3.78 ¼), Sept 5 ¼ cents lower ($3.87 ¾) & Dec 4 ¼ cents lower ($3.99 ¾)
July Chgo Ethanol closed 0.028 cents a gallon lower ($1.434), August 0.028 cents lower ($1.455)
Weekly Ethanol Grind – 1.041 million bpd vs. 1.041 week ago – Stocks – 21.9 million bbls vs. 21.3 week ago
Weekly Corn Export Sales – old crop vs. 600-900 K T. expected – new crop vs. 200-400 K T. expected
Flat price corn tries to rally on reports of some spotty dryness showing up in the central areas of the Corn Belt as well higher wheat prices. The end result was failure to sustain the rally as new lows and new low closes for the current break were registered. Rationale for the sell-off includes the breakdown in the NAFTA talks, benign looking weather forecasts and lastly technical considerations (the inability to hold the early rally).
Interior cash corn markets see little change vs. what was posted on Tuesday. I did see one processor improve his bid by 1 cent and one Mid-Miss location improve its bid by 1 cent. I don’t see much happening at the Gulf. Bear spreading was a noticeable feature as each month lost ground to its next futures’ month. With that said the nearby July was the weakest. How much of the bear spreading can be tied to tomorrow being the 1st day of the “big boy index fund” roll remains to be seen. I can’t imagine new cash sales being all the great given the near two week old break in the flat price.
Today’s outside day of Tuesday with new lows and new low closes has to be a sobering event for those that are still trying to be long. If I didn’t know better it’s the market’s function to make sure no one is on board for a possible weather play later this summer. As much as I think we’ll continue to have a great export program going forward due to the lower SA corn crops nothing in the flat price action or in the spread price action says we are anywhere close to that realization. I know the current price action looks awful but I can’t imagine the corn market will be any worse than another 5-10 cents down.
Daily Support & Resistance for 06/07
July Corn: $3.77 ½ ($3.74) – $3.84
Dec Corn: $3.96 ($3.93 ½) – $4.03
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