Corn Commentary
July Corn closed 10 ¼ cents higher ($3.77 ½), Sept 10 ½ cents higher ($3.86 ¾) & Dec 10 cents higher ($3.98 ¼)
July Chgo Ethanol closed 0.018 cents a gallon higher ($1.444), August 0.016 cents higher ($1.460)
CONAB Brazilian Corn Production Update – 85.00 M T. (26.78+58.22) vs. 89.20 M T. (26.26+62.94) last month
USDA announces 152.0 K T. of corn sold to Mexico – 114.0 K T. old crop, 38.0 K T. new crop
The USDA lowers old crop corn carryout by 80 million bu. – the trade was looking for a cut of 16 million bu. The USDA lowers the new crop corn carryout by 105 million bu. – the trade was looking for a cut of 19 million bu. It’s all about increasing demand from export as well as ethanol usage. World production comes down 3.6 M T. (cuts to the FSU crop size). The World carryin was cut by 2.2 M T. All of this led to a 4.5 M T. cut in the new crop world carryout. Everything the USDA had to say about corn was deemed friendly. I think current crop conditions kept advances from getting out of control. What happens if we get into a weather market? So far we don’t have one but its only mid-June.
Processors continue to look for corn as the recent break has snuffed out any movement. will today’s rally prompt some? River bids remain slack looking. The Gulf is trying to improve. With the exception of July/Sept corn spreads improve especially the 2018/19 crop vs. the 2019/20 crop. Today’s data from the USDA suggests we should moving into a demand phase with its export projections.
Current crop conditions may keep today’s rally from advancing too far. Any hiccup in conditions, however, should have futures surging higher. For what it is worth I’m thinking we have seen our interim lows. If conditions stay good expect to see a trading range atmosphere develop. Without weather $3.90 -$3.95 should cap July corn and $4.10-$4.15 should cap Dec corn. A solid weather threat should bring us new highs
Daily Support & Resistance for 06/13
July Corn: $3.72 – $3.83
Dec Corn: $3.92 – $4.04
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.